The Climate Of Business #93: The barriers to the implementation of decarbonisation agendas

Climate Change Reality

• Deadlier than a shark: Humans use or trade around a third of the world's animals (Euronews )
• US swelters as south-west braces for record-breaking heatwave up to 120F (The Guardian )
• Bad news for nervous flyers: Turbulence is getting worse as the planet warms (CNBC )
• ‘It’s not climate change, it’s everything change’: sci-fi authors take on the global crisis (The Guardian )
• Could painting rooftops white help lower temperatures? Scientists want Barcelona to try it out (Euronews )
• Deadly floods, mudslides bring southwestern Japan to a halt (Al Jazeera )?
• El Ni?o has officially begun. UN says phenomenon likely to threaten lives (CNBC )

• Heatwaves: Why this summer has been so hot (BBC )
• One-third of all food produced globally by weight is lost or wasted between farm and fork — that's more than 1 billion tonnes. Converted into calories, this equates to 24% of the world’s food supply going uneaten. At the same time, 1 in 10 people globally remain malnourished (World Research Institute )
• Bird Populations Are in Meltdown (WIRED )

Business Climate Reality

• Glastonbury’s ‘biggest fan’: UK festival gets an eye-catching 28 metre wind turbine (Euronews )
• Future of deep-sea mining hangs in balance as opposition grows (The Guardian )
• Scientists warn of crop failure ‘uncertainties’ as Earth heats up (Al Jazeera )
• There’s a lot of talk about hydrogen’s potential. But transportation costs represent a big challenge (CNBC )
• Aluminium companies complain about EU carbon border tax loophole (Financial Times )

• Oil giants invest in exploration as profits trump climate (Al Jazeera )
• Climate change: Shipping agrees net-zero goal but critics chide deal (BBC )
• How wildfire risk and extreme heat is changing the insurance industry (World Economic Forum )
• Dutch government wins legal battle to cut flights at Amsterdam airport (Financial Times )
• Millions of workers face up to challenge of heat stress and productivity losses (CNBC )

Reality Check

Increasing sustainability regulations and pressure from stakeholders means that implementing a decarbonisation agenda will no longer simply be an option for businesses. Accordingly, the allocation of sustainability officers and sustainability teams to develop and implement a sustainability strategy is becoming increasingly vital for businesses who wish to remain competitive.?

However, the imminent pressure for businesses to place sustainability at the forefront of their strategy comes with an array of barriers which may vary depending on the region, industry and organisation. As such, this week we will dive into the most common barriers to the implementation of decarbonisation agendas, why these barriers occur, and finally, how sustainability teams can overcome these key barriers within the implementation of a decarbonisation agenda.

What are the barriers to implementing a decarbonisation agenda?

Lack of clarity on how to tie sustainability to company purpose?

Business leaders and teams that do not understand the connection between the company’s purpose and sustainability will be unable to achieve true sustainability success. Business leaders must define their mission through gaining clarity on the purpose of the company beyond profit maximisation and analysing how sustainability aligns with the company’s overall mission. Clarifying this purpose can be achieved through tasks such as setting sustainability targets and integrating sustainability into the organisation’s performance evaluation. Understanding how sustainability ties into the company’s core values and objectives allows businesses to drive meaningful change, whilst ensuring that sustainability is placed at the forefront of their strategy.

Misalignment in organisational structure

A key barrier to the successful implementation of a decarbonisation strategy is misalignment within a company’s organisational structure. Whilst there is no ‘secret formula’ to executing an effective sustainability strategy; the leadership structure utilised is a paramount factor as it dictates reporting lines, cross-functional management and partnerships, thus reflecting how executive leaders value sustainability progress. Ensuring alignment in a company’s organisational structure also ensures that key decision makers are informed about the requirements to meet the company’s climate goals.

To enact a structure that informs decisions and builds accountability within management, a cross-functional approach which seeks to align all components of a business is vital. As such, for a company or organisation to ensure that sustainability is at the core of their business - appointing a Chief Sustainability Officer (CSO) to oversee the development, implementation and management of a sustainability strategy is highly recommended.?

Want to learn more about the best practices when structuring leadership on sustainability? Read here .

Lack of guidance from public policy and regulations

Another central barrier to the implementation of an effective sustainability strategy is a weak regulatory landscape. ESG regulations provide clear guidelines for sustainable practice, thus ensuring that businesses are informed of the requirements they must meet to avoid sanctions, what actions they should take to embed sustainable practices, and therefore how businesses can allocate their resources to positively contribute to the global journey towards net-zero.

Accordingly, voluntary corporate action is not enough to meet universal climate commitments - such as shifting the world to a 1.5?C pathway. These? commitments can only be met if government action is forthcoming via the implementation of clear ESG policies and regulations.

Learn more about the importance of ESG regulations in facilitating business climate action here .

Lack of decarbonisation targets

Companies who do not set clear, science-based decarbonisation targets will ultimately forgo the ability to implement an effective decarbonisation strategy. Companies who set reduction targets for their company and value chain via the utilisation of expert guidance will be able to ascertain a deep understanding of the different decarbonisation pathways and reduction levers that they can leverage to achieve net-zero. Furthermore, companies which set clear net-zero targets will ultimately score higher on ESG reporting and improve their brand reputation; with 79% of corporate executives surveyed by the SBTi finding a strengthened brand reputation following the implementation of science-based targets.?

Meanwhile, a survey of business executives in the APAC region found that 60% of companies in the region had not set decarbonisation targets, and those that had faced a range of obstacles to meeting them. As such, utilising a comprehensive sustainability software will allow companies to receive expert advice and guidance on target- setting, along with the actions required to meet decarbonisation targets.??

Inability to communicate the business value of sustainability

In order to reap the long-term benefits of sustainability, the business value of sustainability is clearly communicated to key stakeholders and decision-makers across the businesses’ wider supply chain. Beyond their contribution to the planet, sustainable solutions are tools that can be leveraged to achieve core business objectives, such as:

• Cost-effectiveness: Companies experienced up to 20% increase in revenue by saving costs from energy use.
• Talent attraction: Attract better talent as 40% of job-seekers expect commitment to sustainability from their employer.
• Compliance-risk mitigation: By 2024, all companies with at least 250 employees will have to follow the CSRD and face considerable fines if non-compliant.
• Talent retention: Businesses saw up to 13% increase in employee productivity and 50% reduction in turnover after implementing a net zero strategy.

Therefore, sustainability messaging must be considered within every aspect of organisational communications and decision-making processes. Companies can achieve this through ensuring that employees are actively involved in the net-zero journey, and that there is clear and open communication with stakeholders surrounding the role of sustainability within the overall company strategy. In doing so, businesses will ultimately create value via enhanced investment returns and long-term asset optimisation .

For more information on communicating with stakeholders in the net-zero transition, read here .?

Lack of understanding of current sustainability performance

A key barrier sustainability teams face when attempting to implement a successful decarbonisation agenda is not understanding the company’s sustainability stance, along with their future sustainability needs. To overcome this barrier, sustainability leaders must take action to ensure that organisation wide and value-chain wide sustainability assessments are periodically undertaken. Businesses who ensure that sustainability performance data is rigorously measured and analysed will be able to identify, and take action, upon the requirements to meet their sustainability goals .??

Lack of clarity regarding how to get started and which technologies to use

Last but not least, sustainability decision-makers are often overwhelmed when it comes to choosing the most effective strategies and technologies necessary for decarbonisation. To overcome this barrier to decarbonisation success, it is highly recommended that companies evaluate the opportunities associated with using a sustainability software, such as a comprehensive carbon accounting and decarbonisation platform , to assist in the development of a dynamic and innovative decarbonisation strategy.?

Ultimately, it is vital that sustainability leaders account for these barriers when taking actions towards sustainability. To overcome these barriers, organisations must assess their current stance on sustainability, which will enable them to develop a clear strategy, set science-based targets, collect data and reduce their emissions. Utilising sustainability software from leading experts, such as Plan A , allows companies to collect and streamline emissions data, measure and analyse scopes 1,2 and 3 of carbon emissions, and report on sustainability and ESG performance.?

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