It is fair to say that the Nordics are a leader in decarbonization through government policy and budget announcements and driven by citizen activism. Whilst writing this article, Finland released their budget proposal, which included tough measures on meeting decarbonization objectives.
In 2019, Finland, Iceland, Sweden, Norway, and Denmark committed to working towards carbon neutrality with the Declaration on Nordic Carbon Neutrality as well as a new vision to become the world’s most sustainable and integrated region by 2030.
The Declaration is on the right path, covering current and future economic recovery plans, redirection of financial flows and investments, and the collaboration between private and public sectors.
Private and public sector collaboration
Structural changes to the way our economies and societies work are needed to reach our global carbon reduction goals, which is why public and private sector must work together. Both carrot and stick need to be used to incentivize decarbonization by enterprise but also regulate and legislate towards this goal.
Creating tax systems that favor carbon neutral companies would be a strong driver for innovation in this area. Establishing semi-private R&D funds with governments investing a share in return for green investments would provide great momentum for change. Carbon reduction targets should also form part of new contracts from government to drive decarbonization across industry solutions.
This push and pull within both private and public sector are necessary to drive the right behaviors across society.
Enterprise actions towards decarbonization
Industries are increasingly understanding the risks presented by climate change and are actively focusing on decarbonization across the organization, impacting purchasing, supply chain and pricing decisions. Advancing change will require investment of money, resource and, longer-term, cultural shifts within the workplace, enabled through a greater understanding of environmental impact through data and analysis. Change will be laborious, but a vital requirement driven by new legislation and market forces.
For those beginning the journey, we recommend three vital first steps.
The first is measuring and understanding your footprint. You must know exactly what your emissions are and where they come from, first starting with a baseline and a maturity assessment to build accuracy as data validity increases. This really needs to consider both direct emissions and those of your value chain, crucial to determining the total footprint of your operations. Data is at the heart of this challenge to obtain, validate and analyze your impact, and utilize available models to implement the most effective actions.
The second is to set ambitious science-aligned targets for emissions reduction and work to reduce emissions of your business processes, products, services, and wider value chains. Your digital environment and business services can support your climate actions and help accelerate decarbonization, but their impact must also be understood. Shifting to the cloud, choosing energy efficient data centers, and utilizing cutting edge technologies, such as high-performance computing, AI and ML can all enable efficiencies in resource consumption but need to be measured utilizing carbon tools and assessments. Digital technology can also enable you to redefine business processes, enable travel reduction through better workplace collaboration tools and optimize the use of real-estate to support organizational transformation.
The third step is to capture any emissions you are still working to reduce. Although reducing emissions is first and foremost, neutralizing emissions (via carbon offsetting projects that are verified by recognized international standards) has an important role to play in our global goal to tackle climate change; by providing a source of vital finance for sustainable development and by strengthening natural or technological carbon sinks. In addition, supporting projects that align to company values and deliver social and environmental value, can be a good means of engaging internal and external stakeholders with your sustainability targets and initiatives.
Decarbonization needs to be on the agenda across the organization, starting from the top to give it strategic importance, direction and empower action. Using concrete measures such as applying Internal Carbon Pricing to put a price on generated transmissions can force change, make environmental consideration part of company culture and educating employees to embed sustainable practices. In today’s competitive landscape, becoming an attractive business through a thoughtful environmental strategy is also crucial to attract and retain talent, particularly within the younger generation who are your key stakeholders for the future.
Why Nordics organizations must go green
With a strong legislative and citizen push across the Nordic regions, enterprise would be smart to accelerate their journey to carbon neutrality. Decarbonization is front and center of government’s budget proposals and this trend will not change. Public expectations and values are so strongly geared towards this change the expectation is on enterprise to meet these ambitions or they will lose their talent and their customers. Accelerating progress towards these goals is no longer optional and leveraging available technologies is a key component to achieve them.