Net zero needs more than climate diplomacy

Peter McGettrick

Managing Director, Advisory

UK

We are in a time of climate emergency. Organisations taking a programmatic approach to net zero need to define clear targets and understand the technological, behavioural and strategic levers they will use to achieve the right outcomes.

The recent report from the Intergovernmental Panel on Climate Change (IPCC) has laid out the scope and scale of the challenges that we face in our own daily lives, as business and as industries, to avoid catastrophe. The message is clear; if we are serious about mitigating climate change then we need a turning point in the collective fight to address it today, not tomorrow.

The 26th UN Climate Change Conference of the Parties (COP26), which takes place in Glasgow in November, will reveal how successful the preceding years and months of climate diplomacy have been. Though we all hope that the outcome of the summit will be to provide some cast iron commitments to collective action, many private and public sector organisations have already started establishing their own roadmaps for net zero. Ideally, they would be taking their cue from the roadmaps developed by national governments, as these will spell out the impact on communities and businesses. But few countries are yet to reach this level of maturity.

The programmatic approach to net zero

Given the immediacy of the threat from climate change this proactive approach is exactly what is needed. Organisations need to be looking at how they can plan for and action a series of measures – many of them incremental – as a priority, and these must form part of their roadmap to achieve net zero in a comprehensive way and at a deliverable pace. So much rests on COP26 because the agreements forged between leaders there will be turned into national decisions and roadmaps, which in turn will spell out the impact on communities and businesses.

A UK roadmap for net zero is critical for built environmental professionals because decarbonising construction will be interdependent on other industries – particularly energy and transport. While we are still awaiting that national strategy, the good news is that many sectors and clients across the construction lifecycle have started their net zero journeys. The actions they have already taken will need to be tested against and used to support a national programme.

The most robust roadmaps are those that set out a programmatic approach with clear targets and an explanation of the technological, behavioural and strategic levers they will use.

They are also open about the constraints and opportunities that lie ahead and the proactive interventions and changes that need to be made. A central benefit of this approach is the ability to be clear about the interaction between differing but complementary agendas, from sustainability and productivity to digitalisation.

For example, driving outstanding performance, transformative change and maximising returns in relation to net zero all require a deeper understanding of how digitalisation can help enhance productivity to reduce waste and increase efficiencies. They cannot be an adjunct or sit in isolation. Understanding and planning for this means taking a step back and looking at programmes holistically.

These considerations are well established in existing sectors focused on major programmes – whether energy, transport infrastructure, healthcare or manufacturing. The net zero challenge relies on building these skills on an even bigger – global – stage.

Transparency is essential to success and must become as commonplace as it is for financial reporting.

Indeed, the two are set to increasingly become linked. Work by the Task Force on Climate-Related Financial Disclosures (TCFD), for example, is designed to align corporate governance around carbon emissions with access to funding. The commercial imperative to decarbonise is also coming in the form of brand reputation and customer choice – as business partners and ultimately consumers seek to make ethical and climate-conscious decisions around their purchase of products and services.

Building resilience

The other side of the funding equation, however, is one of constrained resources as pressure to decarbonise the global economy meets the cost of building resilience against the effects of climate change in the form of extreme weather events. While awareness and incidences of these phenomena – from forest fires, to coastal or alluvial flooding – have increased substantially in recent years, the extent to which they intersect with decarbonisation plans is much less discussed. The reality is that these challenges make achieving net zero harder for the built environment in three principal ways, by:

  • Heightening the sheer demand for investment in the form of defences and more sophisticated engineering, thereby increasing the carbon footprint of the sector.
  • Disrupting supply chains, sources of materials and labour needed to deliver programmes.
  • Distracting and squeezing the vast financial resources needed for the industry to decarbonise.

Investment in carbon offsetting

To be effective, net zero roadmaps must recognise and seek to forecast how these competing forces will interact and be realistic on the significant financial challenges involved. One area that neatly reflects these last two points around climate resilience and transparency is offsetting.

Long a buzzword for corporate social responsibility, it is likely that any organisation’s programmatic approach will need to include a degree of offsetting through investment – for example – in habitat conservation or sustainable energy use. In many cases this will be especially important during the early stages of a programme, when national roadmaps are still dealing with critical areas such as the decarbonisation of the energy grid.

Comprehensive programmes will be clear on the role of offsetting, how it will change over time, and how the strategy will account for climate risks such as forest fires that could undermine its effectiveness. Organisations also need to be alive to the cost pressures associated with increasing demand for offsetting – with these programmes becoming increasingly expensive.

Sustainable retrofit

Maturity in net zero roadmaps varies from sector to sector and between different organisations – but the direction of travel needs to be towards alignment. Our work with the Greater London Authority to drive the uptake of low carbon housing retrofit is a prime example of the benefits of taking a programmatic approach where creating capacity and capability within a sector supply chain is a fundamental objective.

The Mayor of London’s programmes are ultimately about delivering warm, comfortable low carbon housing stock to reduce carbon, improve life chances and wellbeing. But the strategic steps to deliver these goals require the creation of a sustainable retrofit industry to deliver whole house retrofit at scale.

You cannot succeed in this without a professional supply chain who can deliver guaranteed performance and a programme which is an investable proposition.

Diplomacy at COP26 will rightly focus on the need for international action in the now very visible face of climate emergency. We may not have a national net zero strategy before the event opens in Glasgow but in the interim clients must continue to develop practical strategies and keep a ruthless focus on their critical path to net zero. Our future winners will be those setting robust targets and approaching the challenge with a forensic focus on programme detail.

For further information contact:

Peter McGettrick
Managing Director, Advisory

t: +44 (0)20 7544 4000
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