Balancing Climate Target Ambition with Operational Reality

Transitioning to a net zero economy will have profound effects on the business landscape. Companies are grappling with the reality that to achieve the organizational changes needed to tackle the climate crisis and ensure business resilience for the long-term, they often need to fundamentally transform their way of doing business.

High-stakes climate action targets often come along with this journey of business transformation. These targets have huge benefits for organizations, from reducing carbon emissions and future-proofing the business to meeting investor demands for sustainable investments and improving public reputation. Climate action targets such as carbon neutrality, net zero emissions, and 100% renewable energy are typically set out and endorsed at the C-level.

The role of the executive champion in this scenario is critical. Organizations without top-down support struggle to make the ambitious changes required to take substantive climate action. However, it is equally important to not get stalled at the top. Any strategy—especially those publicly announced—must be supported with an implementation plan. Bridging executive-level ambition with operational realities is a must, but presents a challenge for many organizations with ambitious goals.

The C-level is setting the targets – but it’s operational teams that must deliver

A critical consideration when shaping climate targets—and why thorough analysis is so important— is who will deliver on those targets. Frequently, targets are being set at the C-level, or even at the board level, yet it remains the responsibility of operational teams, often across multiple geographies and departments, to deliver on these commitments. Do you have the right team in place to do what must be done and by the timeline you’ve announced?

Underpinning any plan are three important elements for its success:

1. Robust data: Easily managed, enterprise-level data on resource consumption and waste (including emissions) is the cornerstone of any climate action program. The plan starts with baseline data, its success is measured with data, and, ultimately, the disclosure of data is what gives the program validity. For many of our clients at Schneider Electric, getting comprehensive company-wide data management in place is the very first step we recommend.

“By mapping out our company footprint and gaining a global view of resource data, we are now able to scale our initiatives and continue elevating our role in environmental and climate leadership”

—Ann-Katrine S. Friis, Head of CSR, Nilfisk

2. An integrated team: Climate action doesn’t happen in a vacuum; it can’t be managed by one department or level of the organization alone. Instead, the best programs use an integrated, cross-functional transformation team to ensure successful development and execution. This team generally includes representation from procurement, energy management, sustainability, and operations, and may also include supply chain, legal, investor relations, and communications—and it always has C-level executive sponsorship, enabled by clear mandates and resources.
3. Change management incentives: At its core, climate action is change management. And change management is hard. One strategy that has helped many of our clients make meaningful progress—and which we use at Schneider Electric ourselves—is financial incentives that are linked to sustainability targets for everyone from the shop floor to the top floor. Tying compensation to climate action motivates employees to feel a sense of ownership over the program, which drives success.

A key inter-team collaboration: sustainability and energy management

When acting to achieve climate goals, energy management and sustainability are two teams within an organization for which direct collaboration is simply non-negotiable. Even in the pursuit of long-term ambitions, like becoming a net zero company, many organizations find themselves stalled on short-term initiatives because they can’t get buy-in from internal stakeholders. This could be because the business views sustainability and energy management as separate or loosely connected efforts. However, to maximize investments and outcomes, these teams must work in tandem.

There are various initiatives already happening in many companies that benefit from integrating thinking, planning, and execution:

• Developing precise targets and disclosing progress
• Unlocking budget and finance for needle-moving projects
• Adopting new clean energy and digital technology

Strengthening the link across sustainability and energy management teams drives numerous benefits, and helps maximize the results of both efficiency and sustainability programs Read more in our efficient sustainability how-to guide to learn 6 steps we recommend to break down the silos between these teams and ultimately set your organization on a path to reaching your CEO’s climate action aspirations.

At the end of the day, achieving corporate climate action targets is an endeavor that requires drive and commitment, both from the top-down and the bottom-up at an organization. Engaging stakeholders throughout the organization is just one key to bridging the gap between ambition and action. To learn more about ways to achieve substantive climate change action at your organization, read our recent paper, The Decarbonization Challenge: Closing the Ambition to Action Gap.