A path towards achieving net zero carbon targets
Globally, public and private sector organizations are making ambitious commitments about reducing or eliminating their carbon footprint through net zero targets and beyond. Those tasked with achieving these lofty goals are often apprehensive wondering – “How do we make this happen?”
The pressures of achieving net zero targets are real. Financial institutions are divesting their holdings in companies that are high emitters. Workers are asking about implementation and holding their employers accountable. And buyers are looking for ways to improve their supply chain and demanding vendors show progress. The impact of a carbon economy is emerging.
Avoiding pitfalls along the path to net zero
In our experience, we find that it is common for companies to get pulled off their net zero path. Some of the pitfalls that result in the companies not making significant progress or strides in real reductions includes the piecemeal approach and the “tool first” approach. Having clarity on top priorities and how they mesh with an overall net zero commitment is critical to early success.
Our experts find that companies, rightly or wrongly, start with the low hanging fruit which results in a one-project or problem at a time approach. As an example, a company with a large fleet might choose electrification of fleet as a project to tackle. Good in theory, but the challenge is that if the company is replace diesel-powered haul trucks with electric but they are located in a remote area, you may still be required to use diesel generators to provide electricity for the trucks, defeating the transition. It is important to evaluate the full life-cycle and impact to understand and evaluate all potential net zero approaches
With regards to the “tool first” approach companies often assume solutions lie in technology, implementing a wide range of “tools,” without enough consideration of how these tools and technologies will work together with the human-side for the use and implementation. For example, a company might invest in more efficient heating and cooling of its buildings, as a way to reduce its energy emissions. But if there is no management of change, communication on adjusting behaviours, and how the building will function with the people inside of it, then then the efforts from technological improvements may be all for not.
Three keys to achieving net zero commitments
- Think bigger – there are wider implications and ways to build efficiency and cost-savings
Sometimes, the shortest and most cost-effective path between commitment and delivery isn’t the most obvious route.
Consider a company with multiple facilities. This company, is considering adding solar to all its buildings as part of their energy transition. This is a great idea, but the costs of operating many small solar arrays may eat into any profitability that might come from the project. Instead, consider the cost-benefit and emissions reductions for an alternative like a larger solar farm.
- Reaching net zero needs a multi-disciplinary solution
Because reaching net zero impacts so many aspects of the company – operations, human resources, finance, marketing, accounting and others, a strong governance structure and integration of change management principles and approaches is critical. This is achieved by creating and sustaining engagement, managing change with diverse teams involved in strategy development and implementation, and celebrating successes along the way.
Strong governance is critical to ensure accountability for climate actions to be effectively driven through the organization, starting from the top. In addition, there is a broad consensus that organizations should have a clear structure of responsibilities and accountabilities (Microsoft and PWC, 2020).
- Create an ecosystem of partners who can support making it real
Getting to net zero is complex and rarely will be achievable going at it alone. We understand that our clients have responsibilities focused on keeping their business operational. Overloading them with additional projects and mandates for developing and implementing net zero is not only distracting but overwhelming. By creating an ecosystem of external partners who can support in developing and implementing ESG and net zero strategies, companies will be able to make real strides moving using a holistic and systematic approach.
We are committed to our clients, our communities and the future to provide realistic and attainable net zero strategies. As a result, business operations continue, while net zero efforts are also being implemented.
About the Author
Katrina Kroeze is a Senior Advisor – Sustainability and Stakeholder engagement. Katrina has over 10 years of experience providing clients with strategic guidance and support in planning and implementing successful sustainability programs. As a foundation, Katrina’s strong foundation in stakeholder engagement, facilitation, and communications comes plays a critical role in the success of her work. Katrina is committed to developing and leading mutually beneficial engagement processes for a variety of environmental, waste, transportation, and ESG program development projects.
Gregory Carli, Executive Advisor, leads the ESG & Strategic Sustainability practice within GHD’s Advisory team. Mr. Carli oversees the integration of Sustainability & Resilience principles into a broad range of client solutions across GHD’s market segments such as Water, Transportation, Environment, Property & Buildings, and Energy. His focus areas include ESG integration, climate risk management and sustainable infrastructure. Mr. Carli brings over 25 years of experience providing innovative solutions to clients throughout North America and globally in his role as Executive Advisor and formerly as a leader in the EHS+S practice.
Prior to joining the Advisory team, Mr. Carli led GHD’s due diligence team in North America and brings extensive transaction experience including GHD’s work for major container terminal transaction in North America. He has completed numerous sell-side and buy-side assessments for corporations, private equity firms, investment banks and debt providers, and has advised in many jurisdictions around the world.