Thought Leadership

Expert panel: 4 tips for operationalizing Total Decarbonization across your organization

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There’s no denying that meeting – or, even better, exceeding – your environmental, social and governance (ESG) goals can have a hugely beneficial impact on your organization. Not only can it improve your bottom line and support more robust risk management, but it can help you attract and retain top talent in your industry.

As part of Transformation Masterclass Week 2021, some of the brightest minds from Proudfoot came together for a special panel on ESG focusing on the topic of decarbonization and how organizations can make a real impact now and in the future. Here, we’ve collated the key takeaways from the session.

4 tips for operationalizing Total Decarbonization

1. Embrace the first-mover advantage

Tackling climate change can often feel like a broad concept that is simply too big to manage on your own.

“Like with running a sub 2-hour marathon during the Ineos challenge, decarbonization for so many governments and organizations across the world is seen almost the impossible task, bordering more on improbability than impossibility, but is absolutely something that is going to take a Herculean effort to achieve.” remarked Trevor Jamieson, Managing Partner Industrials Europe, Proudfoot.

However, your organization’s ESG goals can have a significant impact, particularly in terms of decarbonization, if you actively take steps to make those changes early.

“You have a choice about the rate at which you decarbonize,” says Lorena Schoenfeld, Chief Operating Officer and Chief of Staff, Proudfoot Global. “You get to choose the carbon excellence strategy, the technologies that you use, and even the offsetting strategies that suit your business today and into the future to achieve the first-mover advantage.”

That allows for oversight of your total decarbonization journey – from carbon policy pricing to your total footprint value chain, to carbon offsets and removals, and carbon dioxide scenario modelling. By latching onto this first-mover advantage, you get to make decisions before your competitors, and your industry at large, tell you how rapidly you need to decarbonize and the price you will have to pay to meet global targets.

You will also become a leader in decarbonization, supporting governments and other companies in their journey to net zero. This will inevitability increase your brand awareness as global consumers continue to take note of organizations making a real move towards decarbonization.

2. Turn planning into action

Far too many organizations fail to scenario-plan their decarbonization goals, but even when they do, they often fail to take the most critical step. To be successful, scenario planning requires an action. This allows organizations to visualize and test their strategies, rather than flying blind with their decarbonization agenda.

“Just like war-gaming, organizations need to put their scenarios into action and see how they play out, so that you then have the next scenarios that show you what will happen,” says Pamela Hackett, former CEO, Proudfoot Global and author of Manage to Engage. “But until we actually take the scenarios and play them through to the endgame, you won’t have the right actions in place to address everything.”

Importantly, there is no organizational change too small that it doesn’t require this level of planning and modelling. After all, you need to know what impact that change will have on the business as a whole before you put it into action. Otherwise, you risk financial and reputational damage and may even fall short of your decarbonization targets.

“When you make a change to a process, system, or product, you need to be able to really look at it and say, ‘What’s the impact?’ and then do something about it,” Pamela says. “I wonder how many businesses are able to operationally look at the guts of their business and see what happens when they make a change – no matter how small – and their ability to reach the carbon goals they set out.”

3. Recognize the difference between developing and surviving

Many of Proudfoot’s clients in Asia are located in developing areas. For more than seven decades, we have been supporting businesses through the challenges of their particular industry. But especially now, with countries like China setting lofty environmental targets for the coming decades, there’s been a shift in how we help those businesses not just survive the changes to industry but thrive.

“After China joined the Paris Agreement in 2016, they decided they wanted to reach their carbon peak by 2030 and be net-zero by 2060,” says Andrew Xu, Vice President of Operations, ESG and Digital Transformation, Proudfoot. “While big businesses don’t have to worry about surviving, mid-sized and small businesses are getting worried.”

Proudfoot has a history of helping these types of organizations improve their throughput with clearly defined ESG and decarbonization targets and by acquiring the right tools and technologies to attain their goals.

As Andrew puts it: “There’s no conflict with companies that want to survive and also be environmentally friendly. At Proudfoot, we always try to help our clients find an ESG solution that balances profitability, company health and social responsibility for carbon-emissions reduction.”

4. Invest in the right technologies

So how can an organization meet – and hopefully exceed – their ESG targets, particularly when it comes to decarbonization? The solution lies in technology.

“Decarbonization is being driven by technology,” says Dave Collins, Decarbonization Associate at Proudfoot.. “For things like energy and transport, we all know that it’s a no-brainer to go to solar and wind – that’s happening very, very quickly. But then you start getting into the trickier ones like steel, for which there is a solution: green hydrogen. And then you get into the really tricky ones like cement, which seems to be one of the most intractable problems that we have.”

But he has good news too: “Technology is going to relatively easily fix 70% of the decarbonization problems, 20% can be addressed with more expensive solutions, which leaves us with just 10% to figure out.”

Dave advises that companies need to move away from a static focus on their decarbonization goals and their current footprint. Instead, they must shift to a strategic mindset, one that factors in their plans to transition and their strategy to manage their emissions reduction.

“Depending on how quickly we can adopt technology and how quickly carbon prices rise, there’s a whole spectrum of outcomes. But we all have to move away from worrying about our footprints, to actually worrying about our variable plans that are going to address our very variable future.”

Proudfoot supports companies in their quest to reduce their CO2 emissions by bringing together the Total Decarbonization Journey in four very specific areas: Carbon Policy & Pricing, the Total Footprint Value Chain, Carbon Offsetting & Removal and Scenario Modelling CO2.

To do this, we stitch together all of the data that makes part of your end-to-end carbon output, utilize advanced scenario modelling technology to visualize how even the smallest changes affect every financial and operational KPI in your business, and conduct big data analysis to identify opportunities, show you your starting point and guide you through a detailed implementation roadmap of the actions you need to take in your decarbonization journey to create the greatest impact towards your Net Zero goals.

Equally, we engage all stakeholders across the organization in purchasing, logistics, operations, support functions, and third-party vendors where needed, to uncover hidden potentials, guide them through change, and obtain their commitment; therefore, achieving and sustaining the operational changes that must take place for the business to reach its decarbonization goals.

To learn more, contact us.

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Posted on January 17, 2022

By Proudfoot Team

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