A recent KPMG survey found that 56 per cent of the top 250 global companies now recognise and accept that climate change poses a financial risk to their business, writes Russell Smyth, partner with KPMG Sustainable Futures.
With carbon being one of the key climate change metrics, and 46 per cent of the largest global companies having already committed to a net zero or similar target, having a detailed understanding of carbon emissions across the entire business is becoming business critical information.
Closer to home, the Irish government has communicated a clear carbon price trajectory of €100 per tonne by 2030. This means Irish businesses need to understand and start mitigating their exposure now. It also makes good business sense. Suppliers’ carbon management performance is increasingly included as part of tenders/contracts evaluations, while corporate customers are undertaking audits of supplier reporting on carbon emissions. Those suppliers unable to demonstrate alignment with a customer’s carbon trajectory risk losing business.
One of the key drivers in the move from brown to green is what we do in our cities. For example, the Irish smart-city project is taking place in Limerick. This is one of two EU “lighthouse” cities that have been selected for a major climate-change pilot programme that will give a lead on how to dramatically reduce the carbon footprint of urban areas.
COVID-19 has accelerated smart-city transformation. The pandemic has underscored that effective recovery requires building strong and connected communities, empowered by data and digital infrastructure to collaboratively contribute to the creation of a resilient future. It catalysed urgent investment in smart-city features such as IoT projects, as cities across the world seek to manage, monitor and automate operations remotely.
A key pillar of the programme is data harvesting, lead by our colleagues in KPMG Future Analytics. This enables the visualisation of energy-saving measures and captures citizen feedback on initiatives ranging from air pollution sensors to electric cars.
A range of new solutions based on digital technologies and digital platforms will be put in place to enable a cluster of buildings to become a net energy producer and not just a consumer. This will include retrofitting older buildings, introducing technologies such as heat pumps, solar panels, energy storage solutions, and electric cars.
An important driver in the switch to a more sustainable future is that of successful circular business models. They can improve efficiencies, de-risk value chains, downstream stakeholders – to reduce pressure on natural systems, and drive innovation. Each of these benefits can improve profitability, reduce costs, and promote responsible business practices. The circular economy is not just about reducing waste, it is a fundamental rethink and redesign of entire value chains as well as an assessment of where inefficiencies can be removed, and sustainable innovation can be progressed. This will require companies to develop creative strategies, upskill workforces, and engage with upstream and downstream stakeholders – to ultimately transition from a cradle to a grave toward a cradle to cradle type approach.
There are many examples of companies that are moving towards or have moved to a circular business model. Key members of the Irish food processing industry including Danone, Dairygold, Glanbia, Tipperary Co-op, Carbery and Wyeth Nutrition and Renewable Gas Forum Ireland, in conjunction with KPMG Sustainable Futures, are progressing work on Project Clover – a food and agri-industry led programme to commercialise a number of decarbonisation strategies within the Irish dairy, and wider food and drink industries.
One of the key objectives of Project Clover is to achieve a circular economy within the Irish agricultural sector, where waste from Irish farms (e.g. slurry) is processed to extract renewable gas to power industry, while the residual material from the process is returned to the land as an organic fertiliser.
KPMG was the first professional services firm in Ireland to achieve carbon neutral status in January 2007, and since 2009 we have reduced our Scope 1 and Scope 2 emissions by 42 percent. We recently announced our intention to achieve net zero globally by 2030, including the use of 100 per cent renewable electricity by 2030.
A version of this article originally appeared in The Irish Times and is reproduced with their kind permission.