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Energy Business
Venkataseshan V
Venkataseshan V
 · Posted in Energy Business

Net Zero - Where Does this Road Head to!

Few weeks back, I had an opportunity to interact with a strategy professional working in a large insurance company.

We will name him X.

X plays a key role in defining the strategy roadmap for his company.

On a different occasion, I was interacting with a working woman who plays a key corporate role in a leading BFSI company. she takes care of her family of three too.

We will name her Y.

One common thread between these 2 interactions was: I asked: How do you see Climate Change impact? How does it affect your strategy and planning?

Surprisingly, response from both X and Y: "Our business/ home is not impacted. It is more relevant to the companies having operations depended on air, land or water"! :-(

X and Y are not outliers. Most of us see and think that Climate Change does impact business organizations or specific enterprises and does not affect them.

On a different lens, as per World Economic Forum (WEF), global emissions are increasing 1.5% per year whereas it should reduce 7% every year to achieve Net Zero by 2050 and to control emission peak by 2030.

Where do we fail? Who is responsible for these target misses?

Everybody! As the proverb says, "Everybody's responsibility is nobody's!"

It is a multi-lateral failure. How can we improve from here? Solution should also be multi-lateral. Come, lets deep-dive into what and how can we contribute towards Net Zero.

Four layers of this transformation, Climate Change Pyramid, are as below:

Individual:

A foundational layer where every one of us fall into and fail in. Like Ms Y, our awarness is limited to the view that Climate Change is real but not my problem to solve.

3 specific steps which shall be taken for enabling individuals to act against climate change are:

  1. Awareness - Govt agencies and other agencies including individuals shall conduct awareness about climate change and its impact on their lives.
  2. Responsibility - Assigning responsibilities through local governance can provide power to such individuals to bring the change in the locality.
  3. Incentives - Similar to corporate carbon credits and Green Financing, individuals shall be provided with such credits through formal and regulated systems and procedures.

Organizational - Operational:

With foundational awareness at the individual level and directions from enterprises, managers and their teams, at operational level, play a key role in executing the transformation in large scale.

  1. Training - Corporates and Education/ Training Organizations shall own the responsibility to train managers and team members.
  2. Traceability - Intra-organizational traceability of carbon footprints and setting targets and progress will encourage individual teams to improve their performance.
  3. Reporting - Climate Change shall become one of the core KPIs of the individual teams.

Organizational - Strategic:

Though individual intent and managerial motivation are there, it is important to show them right direction and means to succeed.

  1. Governance - Organizations Governance mechanism from board and executive levels shall have Climate Change as one of the key parameters in board-level policy decisions. As I told about Mr X earlier, Strategy and Planning shall have Climate Risk as a key element.
  2. Incentive Programs - At operational and individuals, organizations shall come up with innovative incentives for achieving or progressing towards Net Zero. Unlike penalties, incentives mechanism will have a positive impact towards the desired outcomes.
  3. Accountability and Transparency - At board-level and executives shall come up with transparency in their teams and individual transformation on climate change aspects and KPIs. This will motivate other team members to contribute towards collective Net Zero goals.

Govt & Policy Agencies:

 

  1. Policy Incentives - Policy directives from Govts across continents are encouraging. But, due to volatality in the business and environmental landscapes, it is important that such policies and amendments need to be agile. Agility in decision making and implementing the policies is imminent for reaping the benefits soon. A collaborative approach among Executive, Legislative and Judicial bodies with other environmental and control agencies will be a key differentiation for success.
  2. Regulatory Guidelines - Historically regulatory compliances and restrictions have played a speed-breaker in a transformative initiatives to bring a balanced approach between environment and economy. But in the case of Net Zero targets, regulatory agencies shall work with other implementing agencies to achieve the defined targets without compromising the balance.

Image Attachment

Climate Change Pyramid

It may seem a well formulated approach, we did fail so far. How can we achieve a different and desired result?

Let us address the elephant in the room.

Unless we do things differently, we cannot expect a different result.

These are some of the accelerators which shall enable us towards this road to Net Zero:

  1. Leveraging Technologies
  2. Data driven innovation

We will continue this journey from here in creating awareness on Sustainability and Climate Change among us.

My next article on Sustainability and Climate Change will be on: 10-Jan-2024!