The CEOs agenda beyond COP26

LONDON, November 3, 2021 / PRNewswire / – Over the past few years, many companies have set ambitious decarbonization goals and now they are turning their attention to disciplined delivery In a new brief from Bain & Company, Beyond COP26: An action plan for CEOs, the firm uses its deep expertise in advising on sustainable development transformations to guide companies on their way to net-zero.

“Sustainability initiatives have a higher risk of failure than other transformations, which means the challenge of making them happen is much greater,” said Jenny Davis-Peccoud, Global Practice Leader Sustainability and responsibility of Bain & Company. “But business leaders should not shy away from this challenge. Like many successful transformations over the past years, companies can play a leading role in tackling climate change and the challenges of the carbon transition. “

According to Bain research, companies looking to meet their climate goals should make carbon transition an integral part of their strategy, integrating sustainability into their business operations, finding ways to monetize investments in reducing emissions. carbon footprint and involving frontline employees in the transition.

Based on these results, the company has identified four key actions CEOs can take to achieve their sustainability goals:

  1. Make the carbon transition a pillar of the strategy. Too often, a company’s carbon transition ambitions are formulated after the fact. Instead, they should be at the heart of the strategic process, with leaders using their sustainability goals to guide their business decisions. This includes where to play, identify new products or markets that benefit from the transition, and how to win, by creating new ones or by favoring low-carbon differentiation. These ambitions should then be translated into resource allocation and capacity building.
  2. Get more for your net zero money. Increasingly, companies are pushing their carbon transitions with the same rigor as any other business initiative, which means improving the efficiency and effectiveness of the effort while measuring and reducing costs. In addition, it allows companies to find opportunities to monetize investments in sustainable technologies. For example, Cemex markets a range of concrete, Vertua, which contains 70% less carbon and offsets the rest of its emissions to deliver a carbon neutral product.
  3. Integrate the carbon transition into the fabric of the company. Even the best strategy and the best value creation plan will fall apart without the best supporting practices. Three tactics, in particular, support companies in their carbon transition:
    1. Price. Internal carbon pricing is becoming more widespread; more than 2000 companies representing $ 27 trillion of market capitalization adopted it. Once the carbon price is set, companies see it as any other cost in their investment, procurement and R&D decisions, thus guiding their portfolio decisions. It is not uncommon to see the prices of $ 50 To $ 100 or more per tonne of CO2 equivalent, with the median of 25 $ in 2020.
    2. Incentives. Tying the short and long term incentives to the transition ensures that it stays on the agenda. Leading companies have a significant share of variable pay linked to sustainability and deploy these incentives throughout the organization.
    3. Regular. Leading companies are increasingly treating greenhouse gas emissions as they would cost, and they track, report and manage them the same. Instead of an annual Excel-based, compliance-focused exercise, companies use the latest software platforms as a system, such as Persefoni, to extract data from their systems and convert activities into precise carbon emissions. . It helps them understand their footprint and guides improvement.
  4. Avoid the hourglass effect. Sustainability transformations have a lower success rate than other transformations, with only 7% of these efforts reaching their goals, compared to 12% of all change efforts. This is in part due to the hourglass effect, where management embraces the transition, new workers have chosen their jobs based on its sustainability credentials and middle management is left to turn those net zero goals into tangible results, despite perhaps a limited knowledge of the subject or little experience in handling compromise decisions. These workers must also manage income, costs and safety by aligning these goals. Leadership teams need to fill this gap by simplifying their goals, clarifying tradeoffs, and training and educating their employees on how to make good strategic decisions.

COP26 is a momentous opportunity: the business world is focusing more than ever on decarbonization, creating a tremendous opportunity for change, ”said Torsten Lichtenau partner and global manager of Bain & Company’s carbon transition impact zone. “But moving from goals and promises to actions and results requires bold action and dedication. Leading companies will treat decarbonization as they would any other business transformation, defining a strong strategy and plan and preparing to make tough decisions along the way. “

Editor’s Note: To arrange an interview, please contact Aliza Medina To [email protected] or +44 207 969 6480

About Bain & Compagnie

Bain & Company is a global consulting firm that helps the world’s most ambitious change makers shape the future.

Across 63 offices in 38 countries, we work alongside our clients as a single team with a common ambition to deliver extraordinary results, outperform the competition and redefine industries. We complement our integrated and tailored expertise with a dynamic ecosystem of digital innovators to deliver better, faster and more sustainable results. Our 10-year commitment to invest more than $ 1 billion in pro bono services brings our talent, expertise and knowledge to organizations tackling today’s pressing challenges in education, racial equity, social justice, economic development and the environment. We have achieved a Gold rating from EcoVadis, the leading environmental, social and ethical performance assessment platform for global supply chains, which places us in the top 2% of all companies. Since our founding in 1973, we’ve measured our success by the success of our customers, and we proudly maintain the highest level of customer advocacy in the industry.

Media contact:
Aliza Medina
Bain & Company
[email protected]
Phone. : +44 207 969 6480

SOURCE Bain & Compagnie

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