CEO Today - September 2023 Edition

Key to optimising value from decarbonisation strategies is making it part of everything the business does – from the products it makes to the processes employed, as well as management practices and sourcing strategies. With so many factors to consider, how can business leaders ensure that a decarbonisation mindset is implicit in everything they do? Decarbonisation is gaining momentum as a buzzword across industries, but with growing regulatory pressure from government, it is something that businesses of all sizes should take seriously. The UK has committed to reaching net-zero by 2050, which will require a collective, cross-industry effort if it is to be achieved. With huge public backing, as well as interest from investors who are looking to value and acquire responsible businesses, there could be opportunities for businesses that start on a programme of decarbonisation ahead of their competitors. But where should they begin? The most important step is to gain a holistic understanding of the business’ carbon footprint, including its Scope 1, 2 and 3 emissions data. Scope 1 and 2 emissions are those that are directly owned or able to be controlled by the business, while Scope 3 emissions often fall out of the business’ direct control, making them more difficult to influence. Attempting to meet net-zero goals will be impossible without understanding this data, and a carbon assessment will be crucial to understanding the current lay of the land. A lifecycle carbon assessment of individual products and their production lines will highlight areas that the business should concentrate on. This exercise will help to prioritise resources and deliver a marked reduction in carbon emissions as quickly and costeffectively as possible. It will also help to flag longer term projects. However, with Scope 3 emissions often accounting for more than 70 per cent of a business’ carbon emissions, it is clear that reducing operational carbon will involve more than ‘in-house’ projects. While this could seem daunting to businesses setting out on their carbon reduction journey, the best advice is to start by doing what can be done. There are many methods available to reduce carbon emissions within a business’ operations, and industries that implement these sooner could win customer loyalty and secure an advantage over their competitors. For example, investing in renewable energy systems will make an enormous difference to the company’s overall carbon emissions, and a strategy of electrification will deliver both carbon and cost savings over time. Equally, implementing lean management principles will help to reduce energy consumption and minimise waste, bringing benefits for the environment while simultaneously shoring up the bottom line. Changing production processes by adopting more efficient technology, for example by working with AI to conduct machinery assessments and reduce unplanned downtime, will serve to optimise processes and improve operational efficiency, and a materials assessment will enable the business to adapt its sourcing strategies and make low-carbon switches. While there are some risks associated with any change project, such as the risk of operational downtime if new machinery fails or new supply lines are disrupted causing costs to increase, to do nothing is simply no longer viable. This is not only due “By gaining a detailed understanding of their organisation’s carbon footprint and placing decarbonisation strategies at the top of the corporate agenda, business leaders and boardroom decisionmakers will ensure they are ‘lived’ by every function of the business and employees at every level. “

RkJQdWJsaXNoZXIy Mjk3Mzkz