The decisions that we make on carbon emissions over the coming years will impact our planet and quality of life for generations to come. It is for this reason that the future of our Earth’s climate is contingent on whether the world’s population can manage to adequately reduce our carbon footprint, and effectively achieve the target of global net zero by 2050. This requires transformational change on a global scale, and proposes that industries in all economic sectors attain a balance between greenhouse gases (GHGs) released and removed from the atmosphere.
Now more than ever consumers are searching for ways to minimise their individual and collective carbon footprint and waste. In an effort to address the urgency of climate change, there is growing recognition amongst scientists that more active involvement from organisations is fundamental in efficiently tackling climate change, with companies receiving vast amounts of pressure to adopt practices and measures that reflect sustainability. Due to the longevity of this issue, it is imperative that we revolutionise our behaviour on both a personal and organisation level to consider the future of net-zero.
Today’s economy is primarily linear, emulating a ‘take, make, waste’ model; one that is unsustainable to tackle the rapid threat of climate change. An improved model, such as that of the Circular Economy, proposes a system that minimises extraction, ensuring that value of products and material is maintained for as long as possible. →
Net-zero transition requires adjusted business strategies, new business models, sustainable supply chains and adapted processes across every level of the organisation.
Developing a resolution to climate change requires radical and widespread evolution in the way in which companies produce and consume energy. With every innovation there may also be an equal challenge. Whilst commitments to ‘go green’ are growing amongst Australian businesses, an article published by The Conversation found that fewer than half of Australia’s 150 biggest companies have committed to zero emissions by 2050. These statements on commitments are not meaningful unless they are supported by attestations of tangible progress.
But what does a genuine step towards net zero look like?
As noted by McKinsey in The Anatomy of the Net Zero Transition, change of this scale requires “profound economic and societal shifts – affecting countries, companies and communities.” Additionally, in Solving the Net Zero Equation, they proposed the nine requirements for a more orderly transition to net zero:
Physical Building Blocks
1. Technological innovation
2. Ability to create at-scale supply chains and support infrastructure
3. Availability of necessary natural resources
Economic and Societal Adjustments
4. Effective capital reallocation and financing structures
5. Management of demand shifts and near-term unit cost increases
6. Compensating mechanisms to address socioeconomic impacts
Governance, Institutions, and Commitment
7. Governing standards, tracking and market mechanisms, and effective institutions
8. Commitment by, and collaborating among, public-, private- and social-sector leaders globally
9. Support from citizens and consumers
In line with this, it will be imperative for organisations to formulate an engagement plan to address values that may hinder their targets to net-zero and capitalise on their strengths.It will also require motivating and challenging employees to integrate sustainable practises in their lifestyle, and work with companies to propose incentives to recognise and reward employees adopting an environmentally-friendly routine. Prominent leaders or influencers within the company structure may also assist to support cultural change and align such change with net-zero ambitions. This effect can be amplified through the incorporation of net-zero values into marketing campaigns and the consumer experience. Creating coherence across organisational culture, strategy and operating models will strengthen the company’s commitment to net-zero and translate this pledge into action.
Capgemini proposes three steps to building a net-zero workforce:
- Awareness – develop an environmentally conscious corporate mindset, understanding why it is both important and urgent for your company to act.
- Education – develop new competencies, to understand what is expected of you and implement this accordingly. This allows you to assess whether you need to assist employees in developing or advancing competencies, such as knowledge, skills and attitudes.
- Anchoring behavioural change – initiate and support behavioural change across the company in coherence with existing systems and tools
Below is a list of additional practises that may help companies achieving a net-zero target:
- Investing in new technologies that lower emissions and support jobs and growth
- Developing and coordinating low emissions technology policies and regulations
- Supporting businesses and industries to innovate and adopt better-informed practises and technologies and encourage businesses and consumers to reduce emissions
- Shift away from fossil fuels and invest in renewable energy (eg: solar power and hydropower)
- Installation of renewable electricity
- Supporting carbon dioxide removal technologies and practises
- Find alternative solutions for supply chain – investigate their supply chain and eliminate suppliers that have poor emissions
Ultimately, by implementing the above recommendations, businesses can mitigate risks within their value chains, unlock new innovations and collaborations, and respond to mounting pressure from investors, customers and society. As more governments introduce policies towards net-zero, and as stakeholders’ awareness around stability continues to develop, it will be the companies that adopt a circular business model that will find themselves at an excellent business advantage.
As governments endeavour towards a net zero future, they will undoubtedly start mandating significant shifts in how we as people and organisations operate.