The 2023 Climate Week NYC event brought together global leaders, activists, and experts to address the pressing challenges of our changing climate. Our ENGIE Impact leaders were able to learn, lead, and collaborate on various events throughout the week, and pull together key trends, themes and insights that emerged during this landmark gathering — shaping the future of decarbonization.
Too many companies equate innovation with new technology. Our upcoming 2024 Net Zero Report found that 75% of companies say having a leading decarbonization strategy with excellent execution will give them a “considerable” or “large” competitive advantage, but some of those same companies will assume that once they get a strategic roadmap in place, they wait around for the perfect technological innovation or expect that execution will more or less take care of itself.
Existing governance and change management processes are almost always insufficient for implementing corporate decarbonization plans. That’s why innovation needs to include developing new ways of working and developing new business models. Innovative companies are treating decarbonization as a whole business transformation, creating investment-grade roadmaps grounded in data, and establishing systems and processes to review carbon performance monthly. Innovative companies are integrating capital planning into business planning for decarbonization and empowering local leaders at their facilities to make decisions around the Total Cost of Ownership (TCO) instead of just OPEX. They evolve their incentives to include decarbonization as part of performance.
The innovation happens with embracing this long-term, transversal project, knowing it will be disruptive, and that there needs to be a steady focus over many years that requires significant expertise. The leaders and the innovators are the ones pushing the boundaries of the organization internally, encouraging new ways of working, and doing the work.
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Public-private collaboration to date has focused on education, awareness and incentives to support emerging technologies and accelerate new technologies — like supporting the adoption of EVs, low-carbon fuels, renewable electricity generation, etc. The Inflation Reduction Act is a great example of policy that companies are looking forward to leverage at full scale rapidly. Public-private partnerships are also important to accelerate deployment of new technologies and business models.
While the main focus from governments and public bodies has been on incentives, there is broad alignment that we also need more effective and consistent regulation to support driving corporate decarbonization. The regulatory pressure will continue to increase; it is just a matter of time. Building on CSRD in Europe and the upcoming disclosure bills in California, we are in the midst of a shift from voluntary to mandatory carbon disclosures across Scope 1, Scope 2, and Scope 3. Additionally, companies need consistent regulatory standards globally, from carbon disclosures to packaging standards.
We don’t have time for a long, drawn-out debate about the benefits and downsides of regulation.
Companies that want the right regulation — not regulation that is most beneficial to an individual company or sector, but regulation that will support companies in driving decarbonization — should be engaging with governments on how to best support sound frameworks, applicable measures, that focus on execution of decarbonization roadmaps. Companies that are approaching decarbonization as a whole business transformation will be able to do it authentically because climate action will be a genuine top priority.
We are in the midst of a global transformation to a low-carbon economy. Each company making climate commitments needs to treat the work as what it is: a disruptive, holistic, long-term business transformation. Many already are. Our 2024 Net Zero Report found that three-quarters of organizations (75%) say they are prepared to make fundamental changes to their business model to achieve their climate goals. Companies — especially the C-suite — need to have decarbonization as an ongoing priority, integrated with business growth plans. It’s not a one-time decision, and it’s not something to revisit once a year or only at quarterly updates. There is day-to-day decarbonization work and decision-making that needs to happen, requiring ongoing support, continuous improvement, and deep partnership as we all approach these 2030 goals together.
The challenges of yesterday aren’t going to be the challenges of tomorrow — requiring ongoing development of new solutions. These solutions cut across R&D, operations, financial planning and investments, legal, facilities, supply chain management and value chain partnerships, among other areas. Companies need to be open to talking about their operations, exploring new financing solutions, and committing to the strategic importance of a corporate decarbonization program. Transformational business models will focus on total cost of ownership, they’ll integrate as-a-service options, they’ll build coalitions of stakeholder alignment in order to gain buying power and encourage supply chain transitions, and they’ll anticipate the road ahead so we can all walk it together.
Climate Week’s theme for 2024 was “We Can. We Will.” While many companies are already moving in the right direction, the necessary acceleration is not there yet. We need to go faster. And we need to do it today. There are site-level solutions, behavioral changes and data integrations that can all start right now and have an almost immediate impact on reducing the amount of carbon being put into the atmosphere. We all need to do the work of building strategic roadmaps, building executional support, and establishing carbon data management as a core discipline.
Businesses and governments know they can, they know they will, and they need to know that it’s time to prioritize and accelerate doing the executional work.
Corporate decarbonization is a profound business transformation demanding innovation and action. Today, we have available technologies, capital and incentives in the market, but not yet deployed at the speed and scale needed. The challenge ahead is to fully embrace this long-term disruption, fostering new ways of working and pushing internal boundaries.
While we are all focused on the 2030 horizon when we need to see a massive inflexion in global carbon emissions, leaders will have to navigate a complex landscape, keep hopes high, acknowledge progress and steps toward a net zero world, and fight the potential pessimism. We have in front of us a period of profound transformation. Leading companies know how to manage change and we should draw valuable lessons from the corporate world in order to make that change sustainable and acceptable.
As we all engage in authentic public-private partnerships, advocate for effective regulations, and prioritize decarbonization as a top corporate priority, we will all support accelerating the executional work that is imperative in taking climate action.
Let's work together to accelerate your decarbonization plan.