George Markezinis
In today’s world, the urgent need to combat climate change has taken centre stage. The consequences of climate change are evident, and the time for action is now. Businesses worldwide are realizing that sustainability is a critical part of their long-term success. This article explores how companies are leading change in energy efficiency and sustainability while drawing insights from several key articles.
As is put forth by Georgia Makridou in her LSE article, the importance of sustainability in business is underscored. Sustainability is not merely about environmentalism; it is a holistic approach that considers financial, environmental, and social aspects. Companies that integrate sustainability into their strategies enjoy numerous benefits, including reduced energy usage and waste, enhanced brand image, increased revenues, and improved attractiveness for investments. These advantages not only contribute to a company’s bottom line but also align it with global goals of reducing carbon emissions and fostering a more sustainable future.
As an indicator, an article from Reuters highlights the enormous potential for energy efficiency savings in the global industry. The Energy Efficiency Movement’s report indicates that by 2030, the global industry could save an astounding $437 billion annually while reducing carbon emissions by four gigatons. These energy efficiency related savings are equivalent to taking 60% of the world’s internal combustion vehicles off the roads. To achieve these goals, companies can implement strategies such as regular energy audits, optimizing industrial assets, using more efficient engines, and investing in renewable energy sources.
In an insightful piece created by IMD Professor Knut Haanaes and Natalia Olynec , the message is loud and clear: sustainability is a business imperative. Environmental, social, and governance (ESG) issues are becoming increasingly critical for companies across all industries. McKinsey’s Global Survey reveals that 83% of C-suite executives and investment professionals believe that ESG programs will generate more shareholder value in the coming years. Additionally, companies with high ESG ratings enjoy significantly higher operating margins and total returns to shareholders.
Several industry leaders set an example by incorporating sustainability into their core strategies. Schneider Electric, rated as one of the world’s most sustainable corporations, offers technology and energy efficiency solutions to reduce carbon footprints. The company’s commitment to generating 80% “green revenues” by 2025 exemplifies its dedication to sustainability. Finnish refiner Neste pioneers renewable fuels and energy efficiency, while Danish energy company Orsted revolutionizes the power industry by divesting from coal-powered plants and investing in wind farms.
Sustainability extends beyond the energy sector. In the airline industry, JetBlue is pursuing carbon neutrality through emissions offsetting and aligning with the UN’s Sustainable Development Goal 13. Footwear giants Nike and Adidas focus on reducing waste and using sustainable materials. Consumer goods leaders Unilever and Nestlé have committed to achieving net-zero emissions and sustainable packaging. Retailers like Walmart, IKEA, and H&M work across their supply chains to reduce waste, optimize resource usage, and transition to renewable energy sources. In biopharma, companies like Biogen and Novo Nordisk prioritize energy efficiency and waste reduction, demonstrating that sustainability is a global business imperative.
While sustainability gains traction, companies face two critical gaps: the “Knowing-Doing Gap” and the “Compliance-Competitive Advantage Gap.” The former highlights the importance of moving beyond intentions to concrete actions. A study found that while 90% of executives recognize the importance of sustainability, only 60% of companies incorporate it into their strategy. The latter gap emphasizes that while more companies see sustainability as a competitive advantage (24%), all need to prioritize compliance. Compliance addresses regulatory issues and investor concerns.
To address these gaps effectively, management teams can implement several practical recommendations. First, they should align their company’s strategy with sustainability goals, ensuring that sustainability is integrated into the core business approach. Compliance should be the first step, as it addresses regulations, waste management, pollution, and human rights, aligning with investor expectations. Proactive engagement is crucial, as exemplified by leading companies that stepped up their sustainability efforts in response to crises. Quantifying sustainability returns, fostering transparency, and engaging the board and the organization broadly are also essential steps toward successful sustainability integration.
In addition to the strategies and approaches discussed earlier, innovative technologies are emerging as game changers in the journey towards a net-zero future. As pointed up by Saemoon Yoon and Amara Amadiegwu in their article, these innovations offer promising solutions to some of the greatest challenges in achieving net zero emissions.
AI (Artificial Intelligence) Revolutionizes Carbon Emissions Measurement
One of the key innovations mentioned is the use of artificial intelligence (AI) to revolutionize carbon emissions measurement. Traditional methods are cumbersome, and a significant portion of a sustainability professional’s time is spent collecting and cleaning data. AI, through knowledge graphs and natural language models, streamlines this process, enabling accurate analysis at a level of detail that would be impossible with human effort alone. This innovation not only enhances emissions reduction strategies but also presents challenges related to transparency and biases in AI models.
Direct Air Capture: A Crucial Solution
Direct air capture (DAC) has emerged as a crucial solution for achieving a net-zero future. It addresses challenging emission sources like long-distance transport and heavy industry while also dealing with historical emissions. Despite its advantages, DAC is currently expensive and limited in supply. Innovation is essential to make DAC cost-effective and scalable to the gigaton+ capacity needed for climate relevance. Learning from the history of cost reductions in technologies like solar power, there is hope that DAC can become more accessible and affordable, contributing significantly to a sustainable future.
Carbon Avoidance Technologies
Carbon avoidance technologies are another transformative innovation. They produce high-volume industrial commodities without requiring carbon capture and storage, making them more efficient and cost-effective. These technologies replace petroleum and combustion-driven systems with electric systems and carbon-neutral feedstocks. While carbon capture is essential, carbon avoidance provides a direct and permanent solution, pushing the boundaries of technology. Governments and investors should prioritize funding avoidance technologies, which offer immediate pollution reduction and establish the mainstream technology of the future.
Energy Storage for a Sustainable Future
Efficient, scalable, and quickly deployable energy storage technologies are essential for achieving net-zero emissions. The electrification of energy production is crucial, and innovations in long-duration energy storage (LDES) technologies are key to ensuring a continuous supply of renewable power. Companies like Energy Dome have developed globally scalable LDES technologies, like the CO2 Battery, to meet the challenges of a rapidly changing energy efficiency landscape. These technologies are essential to balancing supply and demand and enabling a renewable future.
AI for Climate Change Mitigation and Adaptation
The expanding use of artificial intelligence (AI) can enhance climate change mitigation and adaptation efforts. AI processes vast amounts of data, identifies patterns, and makes predictions that optimize resource/energy efficiency and support decision-making for emissions reduction strategies. AI also aids in climate modeling and assessing risks associated with climate-related events. In a world facing increasing climate volatility, AI becomes a critical tool for both reducing emissions and adapting to the impacts of climate change.
Transforming the Food System with Alternative Proteins
A significant contributor to greenhouse gas emissions comes from the global food system. Transforming this system with alternative proteins, especially cultivated meat, holds great promise for achieving net zero. While the industry is still in its early stages, it offers benefits such as reduced land, water, and increased energy efficiency compared to traditional meat production. With proper support and resources, the alternative protein sector can become a game changer in reducing emissions through energy efficiency and protecting the ecosystem.
To wrap up; at this point, it should be clear that innovations are needed across various sectors, from residential and industrial energy efficiency to transportation and clean energy sources. Hardware development and policy innovations are essential for achieving net zero, with a focus on reducing energy use per capita and deploying clean energy sources. The future of energy involves consuming more but in a sustainable and innovative manner, harnessing unutilized resources, and maximizing energy efficiency.
The transition to a sustainable, net-zero future requires a multifaceted approach that includes integrating sustainability into business strategies, adopting new technologies, and fostering innovation across industries. As companies and individuals take proactive steps toward sustainability, they contribute not only to their own success but also to a more environmentally conscious and prosperous world.
At EcoSkills we recognize the critical importance of sustainability and ESG knowledge for professionals across industries. Our mission is to democratize sustainability and ESG knowledge, making it accessible to every professional. We aim to bridge the gap between industry demands and training, equipping professionals with the tools they need to drive positive impact and meaningful change within their organizations.
By providing cutting-edge education, exceptional value, and comprehensive support, we aspire to shape a global community of experts who lead the way towards a more sustainable future. Through collaboration, innovation, and an unwavering commitment to excellence, we envision a world where ESG principles are embedded in every decision, driving prosperity for all.
