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Digital Vision: COP26

Enabling Net Zero

Combining climate action with commercial sense

Tom Thackray, Director of Infrastructure and Energy, CBI

Linkedin | Mail

Working with national governments, businesses will play a critical role in the rapid transition to a net zero economy. Businesses are often seen as torn between their environmental responsibilities and the drive to deliver commercial returns. Yet at the same time, commercial organisations around the world are committing to increasingly ambitious emissions reduction targets. This begs the question: how are they reconciling this bold action with continuing to look after the bottom line?

Drivers of change

In the first instance, businesses are responding to investors and stakeholders who place increasing value on climate change action and will invest more in firms committed to being accountable for this. Environmentally conscious consumers are also looking for companies based on their track record on sustainability.

There are other commercial incentives that push the private sector to play its part in tackling climate change. By embracing the challenge to deliver on net zero, businesses are making a bet that the right strategy to decarbonize by transforming their operating models and ways of working will pay dividends in the long run, through lower costs and access to higher growth markets at home and abroad.

There is huge power in collaboration between public and private sector communities to shape and deliver climate action plans, such as the global Race to Zero initiative. Governments can also help organisations to scale up the innovation taking place in their supply chains, for example by introducing incentives that enable businesses to collaborate despite the risk of losing competitive advantage, just as they have in the health & safety domain.

Key opportunities exist for governments and business to work together to address challenges and variables that are outside of business’ direct control; examples include sector roadmaps and R&D investment from government that brings together original equipment manufacturers (OEMs) and supply chains, making an attractive environment for capital investment. This joint working can help deliver decarbonization and the regional investment that governments are trying to achieve.

Where next for climate action?

In the future, with digital infrastructure ubiquitous and regulatory frameworks encouraging sustainability and penalising unsustainable practices, the enterprises that thrive will embrace both digitalisation and decarbonization.

Central to the business case for delivering net zero is the fact that operating in a digital economy enables organisations to free themselves from traditional, carbon-intensive practices. There is therefore a clear investment case for businesses to take the lead in this area, with many already successfully combining significant steps towards delivering net zero with safeguarding and enhancing their commercial futures. In a wider sense, by engaging in this fight, businesses are sending a clear signal that a world with a stable and predictable climate is one that is good for growth, good for innovation and, ultimately, good for business.

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Kulveer Ranger, SVP, Head of Strategy, Marketing, Comms & Public Affairs, Northern Europe & APAC