Post by bonnasuttadhar225588 on Feb 15, 2024 4:10:32 GMT -6
According to the Boston Consulting Group (BCG), more companies around the world are making bold commitments to address climate change. However, there is a great challenge in achieving decarbonization, that is, leaving aside fossil fuels such as coal and oil, in an economy that has practically made them the source of its development. The good news is that there is a strong emerging market that drives reaching net zero . From regulatory policies, greater investments and financing, the world is already experiencing a transition that guarantees a sustainable planet. But, in this movement, resources are needed so that CEOs can deal with climate change, which requires a series of requirements and priorities that accelerate the company's transition to net zero, in addition to promoting its prosperity. Main obstacles to a transition to net zero As we have mentioned, stopping fossils is one of the greatest challenges facing humanity. Achieving this requires companies to address and evaluate financial, organizational and regulatory requirements. The number of companies around the world that have committed to sustainability has grown significantly in the last 18 months. As of June 2022, one-third (702) of the world's largest publicly traded corporations have set net-zero emissions targets, up from one-fifth (417) in December 2020, according to the Net Zero Economy Index.
Despite this, BCG analysis Western Sahara Email List suggests that many are still far from achieving their goals, due to the enormous obstacles that stand in the way. Decarbonization technologies require significant amounts of capital, forcing some companies to make difficult investment trade-offs. Time horizons are long, with many targets set for 2050. Added to this, industries must navigate compliance requirements at a time when the regulatory environment for environmental, social and governance (ESG) criteria, which guide the responsible investment portfolio, is constantly changing. . The organizational challenges are daunting: from acquiring the necessary climate expertise to obtaining full organizational support for the company's decarbonization priorities and ensuring that all stakeholders are on board for the journey. Guide for CEOs to deal with climate change With climate action as the central focus of corporate strategy, it will be so common that it will be difficult to distinguish one company from another.
So how do you find a sustainability advantage? Companies must seek differentiation in strategic levers that other companies may have overlooked. The background with climate leaders in developed and emerging markets—such as the European Union—has made it possible to identify five useful practices that CEOs can begin to put into practice to facilitate and accelerate the transition to decarbonization. 1. Business sustainability assessment As a first step, companies should evaluate their products and services against the offerings of their peers to ensure the portfolio is appropriately green. They should decarbonize products where possible and consider removing offerings that are not eco-friendly in favor of those that are. These short-term actions will help finance the long-term agenda. Organizations can take advantage of the benefits offered by investors who are focusing on growth with environmental responsibility. A 2022 study by the World Economic Forum and BCG notes that such corporations receive higher valuations and gain greater access to better financing. With these points in mind, consideration should be given to restructuring businesses to make them more attractive.