Putting talk into practice: creating a net zero environment
The World Economic Forum in Davos this year put a strong emphasis on pursuing a net zero pathway, building resilience, reframing globalisation, and promoting DE&I in every aspect of society. CEOs are facing new challenges as a result of the slow progress being made on the climate front, as Davos 2023 confirmed.
We should be sitting up and paying attention, the UN general secretary warned at COP27 in November of last year, as we are on the verge of tipping points in "climate hell" that are irreversible. The conference featured discussions on a variety of topics, including agriculture, nature, and offsets, or in other words, everything that is affected by or contributes to climate change.
Participation, dialogue, and debate are encouraged at events like Davos and COP. Leaders can discuss new methodologies, approaches, and initiatives there and learn from one another. Leaders in the industry can discuss their goals, challenges, and constraints with regard to sustainability. What can we learn about sustainability and the path to net zero from these major events this year?
Investments into long-term solutions
At Davos, the UN chief urged business to make 'credible' net-zero pledges, or countries will risk greenwashing. Yet across the UK and Europe, organisations in the industrial and manufacturing space have scrambled to be compliant with short-term “sticking plaster fixes”. What’s really needed is investments into long-term solutions. The crippling effects of surging energy prices and gas shortages is forcing companies to identify and implement energy efficiency measures, move away from gas through electrification and reduce dependency on the grid through onsite renewables.
Transforming buildings to improve efficiencies
Buildings consume 36% of all the energy in Europe and produce 40% of emissions – so transforming our buildings is imperative in the race to net zero. The built environment is often ignored from sustainability conversations, but the evidence is clear.
While discussion is essential, we need to talk less and act more. Only then, can we make a true impact with measurable change. Businesses must holistically review their carbon footprint and adopt sustainable business practices into the buildings they use every day. £95 trillion of private capital will be invested in transforming the economy for net zero with a drive towards environmental initiatives. Reviewing technology investments is one place to start for large UK firms as they gain a complete view on their environmental impact.
To truly understand how our buildings are working and improve efficiencies, we must first understand where inefficiencies lie. The only way to accurately measure energy usage at scale is to utilise an energy management platform. Users and owners alike need to gather the data and analytics on every major piece of building equipment. Organisations can then set a baseline to constantly review so they can improve the energy performance of a building. From there, they can then start to introduce smarter energy-saving technologies. Luckily, solutions already exist that are relatively quick to implement.
The systemic sustainability skills gap
Technology is essential, but who will deliver it? According to new research by Boston Consulting Group (BCG) and Microsoft, there is a systemic sustainability skills gap that must be closed, and 2023 needs to be the year of change. If we are going to decarbonise half of Europe in the next seven years, the reality is that we need to reduce emissions in every data centre, hospital, airport, factory and every building to be successful. And with that, we’re going to need the people who truly understand energy efficiency, electrification and renewable energy. The skills shortage is a major barrier to our success and it needs to be fixed if we’re going to be able to see the fruits of that labour by 2030.
Upskilling must extend far beyond the core team charged with making this improvement in order to achieve corporate-wide sustainability goals. To perform their jobs in new, sustainable ways, businesses must promote general sustainability competency and help employees combine their current functional skills with the necessary sustainability skills for their role.
Upskilling must come from the top down, and businesses need to understand the importance and need for sustainability measures. Teams need to have a clear understanding of how sustainability fits into the larger strategic picture, as well as the financial risks, market opportunities, and macrotrends they can exploit.
Businesses in this phase are aided by a core team of sustainability experts established in the mobilise stage, but they must step up their enablement efforts as they start to change the way the business operates.
Actions for the future
Businesses must assess their priorities as the IMF predicts a UK recession, even though other top economies are expanding. Will investments in sustainability suffer as a result of rising costs and predicted declines in profits, and slow momentum in turn? Fundamentally, the longer we wait to act, the harder it will be to prevent environmental collapse. Amidst the current economic crisis, we also cannot ignore the long-term requirements of the planet. Getting out of the recession and achieving a green recovery is a huge opportunity.
In order to succeed commercially and sustain the health of the environment, businesses have a strong incentive to move quickly. Due to their improved Environmental, Social, and Governance (ESG) credentials, early adopters can anticipate a "sustainability premium". The planet, however, stands to gain the most because if meaningful decarbonisation efforts are made today, the world can avert a future climate catastrophe. We can achieve the net-zero targets we've all set, but only if we take action right away.
For both business success and the sustainability of the planet, there is a strong incentive for businesses to move quickly. A "sustainability premium" can be expected from the early adopters due to their improved Environmental, Social, and Governance (ESG) credentials. The planet, however, stands to benefit most from meaningful decarbonization efforts made today because they will help prevent the coming climate catastrophe. If we take action now, we can achieve the net-zero goals that we have all set.
