Community Update
Joining the Dots of Sustainability
An increasing number of high-profile companies are rolling back on their climate change targets and plans for Net Zero. Nobody is suggesting the scale of transformation required is straightforward. While there are pockets of innovation and progress, the sobering truth is that businesses and governments are behind where they need to be.
At Criticaleye’s recent CEO Retreat, held in partnership with IBM Consulting, AlixPartners, DWF and London Stock Exchange Group, the consistent message throughout the sessions was that collaboration is essential, both within and across sectors and stakeholder groups, if stated targets around carbon reduction and nature are going to be realised.
Oday Abbosh, Global Sustainability Leader at IBM Consulting, said: “Many global companies have set targets for Net Zero, but the focus now is on how this is operationalised and made real. This is where the entire leadership team comes in as they must be the driving force behind it.
“A few years ago, you might have run this as a siloed element of the organisation, but now it needs to be everywhere. Ultimately, I think this needs a bottom-up and a top-down approach.”
The mentality of the CEO and Board needs to shift if that flow of ideas is going to happen, certainly at an organisational level. Serena Lang, Chair, Trifast and a NED at Henry Boot, where she Chairs the Responsible Business Committee, commented: “A good strategy enables a business to be responsible. So, when I think about Henry Boot, it’s a bottom-up organisation with clear leadership from the top.
“We have forums on things ranging from climate to employee engagement and that all feeds up. I think that two-way communication helps to embed things into the business.”
There’s a cultural element to this, of course. Serena, who is also a Board Mentor at Criticaleye, continued: “Boards have to work closely together and have that trust with the executive team so there is openness. They must feel able to ask for input.
“Quite often, Chairs and NEDs will be working across different businesses and therefore have a range of experiences, so collectively this can be drawn on, which I think makes for a strong team.”
The complexity of innovation and collaboration across sectors, in the context of a volatile economic and geopolitical backdrop, while also focusing on performance, is no easy task. Matthew Blagg, CEO of Criticaleye, said: “If leaders are going to succeed, they need to take people with them. That means they have to lobby and build relationships with key stakeholders — organisations do possess more power when they come together on messaging.”
Lorcan O’Connor, Group CEO of Córas Iompair Éireann (CIÉ), which is Ireland's largest public transport operator, affirmed that “sustainability, from the Group's perspective, is still the guiding star” and expressed optimism that the organisation is moving in the right direction.
He explained: “As one might expect, there are various practical operational challenges on our transition journey to Net Zero. These include teething issues with new technologies and the pace of the ‘greening’ of the electricity grid.”
Dame Sue Gray, Chair of CirculAIRity, a start-up which seeks to produce synthetic and sustainable aviation fuel, commented: “Collaboration is important because we can't do it on our own. We need to create a Net Zero system, making sure the whole system works together.
“So, for example, we need to utilise/build refineries close to renewable energy and waste heat sources. For this to work, all parts of the system must come together, and that's what we're passionate about achieving.”
A collective shift is required if a muti-stakeholder approach to sustainability is going to work, which includes greater clarity and commitments from governments and regulators. Oday said: “This is about courage and leadership. Deep down inside, we all know we need to do things differently. Importantly, companies that genuinely embed sustainability in their workflows outperform their peer groups on profitability, sales growth and talent retention.
“This cannot be a box-ticking exercise. When we talk about embedding sustainability, it's across the entire organisation — so it’s in procurement, the supply chain, HR, finance and so on.”
The innovations and technology needed to drive positive change are becoming increasingly available, but that’s where business leaders need to act responsibly. Oday continued: “Everyone's talking about Gen AI — and it does enable productivity, whether that is around reporting compliance, or accessing data from multiple different sources inside the organisation and across your supplier base, but there are so many other uses of the technology beyond productivity improvement.
“The stuff that I particularly like relates to things like geospatial mapping and using that data for regenerative agriculture purposes, or using climate data to help inform where to site wind or solar farms. There’s a wealth of stuff you can do and we’re just at the beginning of understanding the possibilities.”
Again, there are practicalities to reflect on. He added: “You need to be super thoughtful when and where you choose to apply Generative AI technology. This is not a panacea that is going to solve every issue. You need to reflect on what models you use and understand their energy consumption, thinking about the infrastructure you’re using, the location of the DC [data centre] etc. There are lots of considerations to work through.”
According to Matthew, a significant aspect of the complex transformations required to execute on climate change goals feeds into underlying issues around skills and leadership capability within organisations. He said: “You can't break out of the capital structures that we have in a simplistic way. What I do think CEOs can do – and I don't think they are doing enough of – is focus on the change culture.”
Meanwhile, the clock is ticking.
Marc Barber, Director of Content, Criticaleye