A little over half of the world’s largest 2,000 companies have adopted pledges to achieve net-zero carbon emissions (a number that has jumped 40 per cent over the past 16 months). However, an alarming 93 per cent of these companies will fail to achieve that standard by 2030 unless they drastically change their approach, and only 20 of these company’s commitments meet United Nations guidelines for what constitutes a quality pledge.
Meanwhile, greenhouse gas (GHG) emissions have reached an all-time high and will continue to rise without intervention. This leads us to ask…Why are companies struggling so drastically in their decarbonization journeys?
Frederick Morency, vice president of Sustainability at Schneider Electric, is helping customers in over 40 countries decarbonize and efficiently manage their energy use, which includes building a clean energy plan for Indigenous communities with Clean Energy Social Enterprise (ICE). He is also responsible for Schneider Electric’s sustainability operations in Canada, where Schneider Electric has recently been named the world’s most sustainable company by Time Magazine and Statista.
Environment Journal recently engaged Morency to share his perspectives on net zero challenges and how to make meaningful change toward successful outcomes in managing GHGs.
What are your responsibilities with Schneider Electric as they relate to the Canadian market?
I lead the company’s Environmental, Social, and Governance (ESG) commitments across all 24 sites in Canada. I drive our sustainability strategy, focusing on both decarbonization and energy management initiatives to generate value for our customers and communities.
Additionally, I oversee government relations and advocate for policies supporting the Canadian economy and energy transition. My role also involves engaging with various sectoral associations to promote collaboration and sustainable development within the industry.
With 93 per cent of the world’s companies failing to achieve their net-zero pledges, what is happening and why is this such a struggle?
The struggle to achieve net-zero targets can be attributed to a combination of ambitious goal-setting and operational challenges. While there has been a notable increase in global companies declaring ambitious sustainability targets, with nearly 60 per cent of industrial companies now publicly committing to these goals, research from 2022 shows that only 12 per cent of Fortune Global 500 companies are successfully meeting their ESG targets despite having a clear decarbonization roadmap. This disconnect arises from a common issue: companies often set enterprise-level targets without fully accounting for the operational implications and associated costs, resulting in plans that are not viable in practice.
The underlying reasons for these struggles include inadequate assessment at the site level and fragmented project execution. Many organizations face difficulties in aligning their energy efficiency and sustainability efforts with existing plant and facility management priorities, where these initiatives may be seen as conflicting with core KPIs such as productivity and quality.
Additionally, projects are frequently executed independently with limited collaboration or knowledge-sharing between sites and corporate teams. This lack of cohesion results in missed opportunities for efficiencies and economies of scale, ultimately widening the gap between ambitious goals and practical achievements.
What are common hurdles that corporate leaders need to tackle when working on net-zero plans?
Corporate leaders often encounter several key challenges when implementing net-zero plans. Primarily, they must address organizational issues such as data transparency, governance alignment, financial constraints, and enterprise-wide execution. Achieving successful alignment between corporate and site-level initiatives is crucial for integrating sustainability ambitions with operational goals. Financial barriers are significant, requiring innovative funding models tailored to each company’s unique situation to mitigate risks and ensure sustainability efforts do not strain resources. Data transparency is essential for informed decision-making and tools like EcoStruxure Resource Advisor provides real-time insights across their portfolios.
Finally, scaling sustainability initiatives requires a strategic approach, with a focus on energy reduction, electrification, and renewables. Developing tailored solution playbooks and overseeing the entire implementation process helps maintain progress and achieve long-term sustainability goals.
How do you and your team determine if/when a company is ready to establish a net-zero goal?
Determining a company’s readiness for a net-zero goal starts with the commitment of its leadership. The dedication of CEOs and their executive teams is crucial, as the net-zero goal must be embedded in the company’s core purpose and be a collective aim across all business units. This commitment should be substantive and not superficial, ensuring that it drives real change rather than serve as a checkbox.
In our experience, companies that initially set ambitious goals without being fully ready often need to build a solid foundation first. This includes establishing strong governance, ensuring data transparency, and fostering organizational cohesion around ESG commitments. For companies that undertake this foundational work, setting a net-zero goal becomes a transformative process, reshaping their culture and enhancing their competitive edge for a sustainable future.
How can environmental consultants make a meaningful change to meet these important goals?
Environmental consultants play a pivotal role in driving meaningful change, particularly through an “end-to-end, integrated approach” that spans from strategic planning to seamless implementation. This approach necessitates a deeply collaborative and consultative engagement with diverse client stakeholders and C-level sponsors.
By leveraging their expertise and fostering strong partnerships, environmental consultants can guide organizations in navigating complex sustainability challenges, identifying opportunities, and implementing effective strategies that align with environmental goals and business objectives. This comprehensive approach not only ensures the successful integration of sustainable practices, but also fosters a culture of environmental stewardship throughout the entire organization.
Featured image credit: Getty Images
