How to make the most of climate change conversations
How to make the most of climate change conversations
World leaders and business leaders are gathered in Sharm el-Sheikh for the 2022 UN Climate Change Conference this month. The event is widely regarded as the first major “implementation COP”. Entities will be asked to deliver on their climate change pledges and follow through on previous agreements to limit temperature rise to 1.5°C above pre-industrial levels.
COP27 is therefore a carpe diem on climate change. We must seize the opportunity to improve the lives of the estimated 3.3 to 3.6 billion people at risk of catastrophic weather and heat events.
Without deep and immediate emission reductions across all sectors, our 1.5°C target is unattainable.
And as the United Nations Intergovernmental Panel on Climate Change says, acting now can halve greenhouse gas emissions by 2030 and put us on track to reach our goal.
Reframing our approach can help. Climate change carries significant risks – but considering its impact in this context alone is to miss out on woods for trees. We should rather look at the big picture.
A common attitude towards hurricanes and droughts is to view them as isolated events with a one-time impact on results. In fact, they’re part of a trend exacerbated by human-induced climate change, according to an analysis of 504 recent extreme weather events.
Government and business leaders believe this trend will have long-term consequences. They rank failure of climate action as the biggest long-term threat to lives and livelihoods, according to a poll conducted for the World Economic Forum’s Global Risks Report 2022.
But the success of climate action, on the other hand, could go a long way towards producing beneficial consequences.
At COP27 and beyond, we have an unprecedented opportunity to usher in a green economy.
Growing demand for net zero offerings would create unprecedented opportunities worth more than $12 trillion in annual sales by 2030, McKinsey projects. Gains would come from new value pools, including in infrastructure, transport, energy, power and buildings.
Government policy is already weighted in favor of net zero savings. In the United States, President Joe Biden’s Cut Inflation Act provides $369 billion in climate and energy investments and could create 1,000 new businesses. Across the pond, the European Commission’s Global Gateway strategy aims to mobilize 300 billion euros ($292 billion) in sustainable investments worldwide through 2027. Similar laws have been adopted or are in progress in Australia and the United Kingdom.
To a greater or lesser extent, this new wave of legislation prioritizes investments in renewable energy, sustainable infrastructure, resilient transportation, supply chain, and healthcare security.
It is now up to companies to react. We are in the midst of what the UN has called a critical decade of action. With the tight schedule ahead of us, it is our responsibility to work to make a fairer, net zero world a reality.
The scale of the task may discourage all but the most daring, but here we can take inspiration from recent events. The COVID-19 pandemic has taught us all that the human race can triumph over adversity under the most difficult of circumstances.
If we lead with strategic intent and follow through with unwavering action, we can rise to the challenge and win.
A three-point strategy can help us unlock sustainable opportunities.
First, approach climate commitments with an entrepreneurial spirit. Companies around the world have already pledged to achieve net zero, and action around these pledges has started to become visible as COP27 approaches. Now is the time to recast those commitments into concrete, achievable goals for the next quarter, next year, the next five years.
In business, we use one-page strategic plans, such as those offered by management consultants Jim Collins and Verne Harnish, to identify what our goals are, how we want to get there, and where we are now. We can employ a similar strategy to identify and target Scope 1, 2 and 3 emissions – and beyond.
Second, flatten the curve with immediate action. As the UN IPCC says, now is the time to act. Without immediate and deep cuts in emissions across all sectors, limiting global warming to 1.5°C is out of reach. The tools to achieve such reductions are already available in the form of existing, proven and competitive technologies, many of which are linked to investments in digitalization and electrification.
For example, data-driven digital technologies have proven to business leaders at Henkel, BP and other Fortune 500 companies how they can identify pathways to reducing emissions quickly and at scale. As companies know, change management is a process. We must invest today to see results tomorrow.
Finally, collaborate to accelerate.
Whether it’s growth hacking or business process outsourcing, partnerships are critical to progress. Forward-thinking companies are already addressing the Scope 3 emissions challenge by engaging with policymakers and accelerating their efforts to support the decarbonization of their supply chain, including through business-to-business collaboration models and even intersectoral.
In one example, a leader breaks down organizational data silos to share data within a connected industrial economy to promote and consolidate system efficiency and support energy transition. Collaboration is a proven strategy for unlocking business gains; properly exploited, it can help achieve net zero.
We are facing a watershed moment to align our business models with climate action. More companies are adopting science-based climate goals to achieve more sustainable operations and demonstrate increased accountability. Already today, around 80% of large international companies report on sustainability. This is significant progress.
However, this does not mean aligning business strategy with the low-carbon transition or looking for ways to accelerate climate action through essential business activities.
We recognize that where we can drive exponential impact is through the products we bring to market and how we support our customers on their decarbonization journey.
Measuring and managing our carbon footprint is an important activity for any business. But as business leaders, now is the time to look beyond and identify how our businesses can uniquely contribute to securing a better future for humanity and our planet.
Reframing the conversation around the opportunity before us can bring stakeholders to the table, while supporting sustainability for all. COP27 presents a watershed moment to reverse the global trend of climate change, deliver on our promises and deliver a sustainable future for all. Can we seize the moment?
• Peter Herweck is the Chairman and CEO of AVEVA, a FTSE 100 industrial software company.
Disclaimer: The opinions expressed by the authors in this section are their own and do not necessarily reflect the views of Arab News