Nic Frances believes risk is what defines great leadership – taking the leap before others and grabbing the opportunity.
“Lots of people have ideas, the thing that stands leadership apart is risk. Risk is saying I’m willing to risk my name, my wealth, my status and my relationships to date – personal and public – to stand by an idea and risk looking silly. It’s when you come to the conclusion that you don’t mind looking silly that you’re saying you’re willing to lead,’’ he says.
As the founder and Executive Chairman of Cool nrg International, a global leader in large-scale energy efficiency programs and carbon trading, Nic knows that risk can also have its downside.
After a few stellar years when the company grew strongly, the past 18 months have been tough for the Melbourne-based Cool nrg. The uncertainty surrounding the lead-up to the Copenhagen climate talks - and its ultimate failure to reach a consensus - has all but frozen the more innovative aspects of the carbon trading industry as well as Cool nrg’s bottom line. And then there’s Australia’s own dithering and delay over whether and when to put a price on carbon.
Nic Frances has mortgaged his house to keep his ideal going for the company and keep his 10 staff on the payroll. The good news is that one of the world’s largest banks, the South Africa giant Standard Bank, now shares his vision that carbon trading will become a critical market in the future and has become a partner in Cool nrg.
Cool nrg is also on the cusp of rolling out a program that will help install millions of energy efficient light globes in the homes of more than 12 million of the poorest people in Mexico – saving hundreds of millions of dollars in energy costs and more than 12 million tonnes of carbon that Cool nrg can trade.
This program is likely to become the beacon – pun intended - for effective mass energy efficiency programs around the world.
“The poorest people of Mexico will save about $300 million in energy costs every year and the Mexican government doesn’t have to invest in two new nuclear power plants to meet future energy needs. Everyone becomes a winner,’’ he says.
But just keeping Cool nrg together while the details of the Mexican program are finalised has been hard work for Frances – hence the need to pump his own capital into the business. That meant having a conversation with his own two shareholders– his two children (Charlie and Holly) - who share the family home now mortgaged for the sake of the business.
“For me it’s lovely to now have regular conversations with the kids about how the business is going. It’s been lovely for me to know that my kids understand I have taken risks, but they also see I’m passionate about what I want to do – and they understand that.’’
Frances began his corporate career as a stockbroker in London, then wanted to contribute more to society, so for 20 years worked in the not-for-profit sector, along the way becoming an Anglican priest in 1996.
It was an offer to run the Brotherhood of St Laurence that brought him to Australia in 1998, as he took the battle against poverty to the streets.
Ultimately he began disillusioned with the ability of the charitable sector to deeply tackle the most inherent social problems facing Australia (because he believes they are not inherent risk takers), which is why he left the Brotherhood. He opted instead to combine the private and charity sectors and create a social enterprise – with a bent on environmental improvement. The result is Nic began Cool nrg about three years ago.
“The first few years were great at Cool nrg because not only Australia - but the world - wanted to act on climate change, and we do mass energy efficiency campaigns that can touch 50 per cent of the population in a weekend,’’ he says.
“I believe we are the only company in the world that can do such mass campaigns. So a few years ago things are going well and then Copenhagen (Climate Summit) is announced and business just stops because everyone is waiting for Copenhagen. At this point I’m thinking ‘Oh my god ‘ because our customers are waiting to see what happens. Of course nothing happened in Copenhagen so again nothing happens to our business – and that’s been the reality for the past year.’’
The prospect of the Mexican program – called ‘Las Verde’ meaning Green Light – is what attracted Standard Bank to announce in October that it would become a partner in Cool nrg.
“The Standard Bank deal makes sense. They’re a bank and they’ve got a trading desk that trades carbon and they want access to cheap carbon that we can supply – so when they put carbon on the table for trading they can make a big mark-up instead of a small clip in doing the trade.’’
With a major partner, Frances can now begin to feel more confident that his leadership ambitions for Cool nrg will become a sustainable reality.
“I’m in a space where I’m happy right now. Our company aims to achieve anti-poverty and energy efficiency and engages in carbon trading all in one – and that’s unique. Maybe while the world is procrastinating on climate change agreements for the next few years we can be working in Mexico working on the ground. That’s a good enough outcome for me.’’
