Making a public commitment to decarbonization is crucial. To do so, sustained effort, investment, and strong leadership are needed to achieve ambitious targets. The main barriers to effective decarbonization tend to be practical implementation issues such as budget allocation, organizational structure, and supply chain problems, rather than a lack of organizational will.
Based on a report developed by ENGIE Impact, the steepest hurdle faced by organizations in decarbonizing isn’t corporate buy-in. Instead, it was found that practical challenges such as budget allocation, organizational structure, and supply chain issues played more significant roles.
So what can be done? Well the report distilled its findings into six actionable key takeaways that executives can draw on to drive action and acceleration for effective decarbonization within their organizations.
What are the key takeaways?
Cutting funding for decarbonization initiatives and focusing only on short-term returns can slow down or even halt progress towards achieving transformative carbon reduction outcomes. Therefore, the key to successful decarbonization is sustained investment and strong leadership, with a balance between quick wins and long-term strategies such as decarbonizing heat or deploying carbon capture and storage.
Organizations are increasingly empowering local or functional decision-makers to embrace decarbonization solutions. To enhance top-down thinking, it is essential to engage front-line staff in the development of decarbonization solutions. Organizations should design a decarbonization capability model that leverages their strengths and delivers the maximum return on decarbonization investment.
To avoid misalignment between senior executives and those responsible for implementing decarbonization initiatives, organizations need to realign executive vision with operational know-how. It is also crucial to provide executives with an accurate understanding of ongoing decarbonization progress, benchmarked against progress in the industry where possible.
Executives should be held accountable for the success of their organization's decarbonization activities to avoid the risk of greenwashing accusations. Consider incorporating clear decarbonization targets as part of management’s formal performance reviews, and set clear consequences for those who fail to deliver sufficient progress on decarbonization goals.
To accelerate the impact of decarbonization, executives should explore innovative finance models to quickly access capital and scale projects. They can also implement carbon pricing and budgeting to assess the environmental risks and benefits of corporate investments. Investing in data tools is crucial as well, as they provide a reliable source of truth about the organization's progress.
Working together with supply chain partners is crucial for organizations to achieve long-term carbon reduction. Leaders should be transparent in sharing their organization’s Scope 3 targets with suppliers and encourage collaboration, while also using formal procurement processes to make decarbonization commitments or targets binding.
Accelerating decarbonization impact
To sum it up, your decarbonization journey requires sustained effort, investment, and strong leadership. By implementing the key takeaways we’ve discussed, organizations can transform challenges into long-term advantages and contribute to a sustainable future.
Read the full 2023 Net Zero Report to learn more.