Climate change is the issue of our times. In mitigation of climate change corporates will have key responsibility. This responsibility was well acknowledged at CoP 26 at Glasgow especially on Net Zero transitions, Commodity Driven Deforestation, Clean and Coal Power and also Green Hydrogen. The green financing space also witnessed encouraging progress.
Climate response actions have gathered momentum since the CoP, with corporates, banks and financial institutions joining the Government and Civil Society in sharply accelerating climate response actions. More than 136 of the countries have announced Net Zero target dates. A large number of corporates have now committed to Net Zero goals.1
Climate response is complex. For corporates this requires actions on their own part across organizational functions and the direct and extended supply chains. It is difficult to understand granularly where action has to be focused and prioritized to genuinely reduce the emissions footprint.
Acting on the scanty knowledge at scale and with rapidity is difficult. Yet, without concrete action the goal of arresting global warming will slip away. Indeed, more intense actions than the present Stated Energy Policy (STEPS) of nations will be needed to contain the effects within 2 degrees. Governments, society and in particular corporates will have to step up ambitions and actions rapidly.
Mitigation actions would need to be accompanied by climate adaptation measures. Attention of corporates will be required for business continuity and resilience in the face of escalating climate incidents and disruptions in the wake of such incidents. There would be unforeseen challenges on this path including from geopolitics which could upset set plans. However, such disruptions can also bring in new opportunities to accelerate climate action, especially when it helps countries and organizations become more energy secure. Six specific measures in such times would be around:
- Accelerating use of electricity for mobility, buildings, industrial production, and other amenable applications
- Expanding renewable energy, energy storage in various forms, green hydrogen, and other frontier technologies.
- Rapidly scaling up energy efficiency and circular economy programs
- Evolving new technologies that address local conditions and resource base
- Seamlessly integrating energy, environmental and financial markets.
- Co-opting the start-up ecosystem for all of the above. Rapid innovation at scale by start-ups has indeed been a hallmark of the recent years.
Inevitably the change will require new products and services for betterment of the planet and society and also bring innovation their production and delivery. New challenges can truly accelerate innovation, and this is already happening in clean energy production, energy storage, Hydrogen, low carbon mobility and a host of other areas.
Rapid decarbonisation is one the principal levers for containing climate change. In itself decarbonisation is a very large theatre with numerous fields of play covering corporate strategy, envisioning of new products and solutions, technology, supply chains, etc. Decarbonisation at scale has to address issues related to fuel and feedstock, often rapidly altering large and well-established mechanisms. In all decarbonisation – and more broadly ESG – is set to transform organisations. This will involve a vast ecosystem which will have to come together to pull in a range of skills and competencies across all sectors of the economy and across various functions.
Data is a key challenge in decarbonisation and technology is an ally. Traditional data capture mechanisms were not designed for decarbonisation and hence the data availability is also patchy. For establishing credible baselines and goals, tracking, and reporting progress as well as for large scale transformation that rapid decarbonisation would necessitate, data is an essential ally. Mechanisms need to be established for data capture to acceptable levels of accuracy and periodicity. Technology has to support data capture, decision making and enablement of the organization across levels in addition to the reporting needs.
Society and people are at the centre of climate change mitigation and adaptation. Communities will need to work together to design and implement solutions. Platforms to bring together industry leaders, intelligentsia, government, and civil society leaders to engage and ideate on the key challenges and priority interventions will need to be established and have to inform policy, corporate and societal actions. Only such concerted actions would give us a chance to limit global warming to acceptable levels and manage its impacts.
A version of this article appeared in The Economic Times -Energyworld.com on 21 March 2022.