Our ways of living have severe consequences for future generations. PwC’s Low Carbon Economy Index 2019 report highlights that the reduction in global carbon intensity continues to fall short of the rate needed to meet the targets pledged in the 2015 Paris Agreement. We must take measures to limit our carbon footprint.
Some businesses have already embarked on this challenging journey and 47 companies in Ireland including PwC have signed the Low Carbon Pledge. The signatories commit to halving their Scope 1 and 2 greenhouse gas emission intensity by 2030.
Organisations have to embrace transformative changes around decarbonisation that are extensive and profound. This transformation will be delivered by portfolios, programmes and projects established by governments and businesses. We need to adapt our approach to sustainability so it becomes an inherent part of change delivery.
The term "sustainable development" has been used for decades. It is a "development that meets the needs of the present without compromising the ability of future generations to meet their own needs".
As responsible corporate citizens, we must keep future generations' needs in mind. We should incorporate sustainability targets within our strategic business planning. A robust integrated strategy will address complex regulations, maximise performance and reduce the environmental impact. That, in turn, will result in long-term growth, increased public trust and will protect brand value.
For example, some banks have set strategic targets in terms of “green” financing to support clients who wish to transition to a more sustainable business model. By financing their clients’ sustainable projects, and in some cases incentivising them with preferential interest rates, banks are supporting them achieve their goal of minimising their environmental impacts. This demonstrates how organisations' strategic goals can support both profitability, public trust and sustainability.
So, if the vision is clear, what is stopping us from consistently integrating sustainability criteria within our business strategy? It is because developing and integrating a sustainability vision into a long-term plan is challenging. Often it is difficult to know where to start. Some would say that there is no robust method or typical structure to approach sustainability. Others may encounter a lack of tools to track, measure, quantify and interpret related indicators. The good news is there are more and more examples to follow, and some blueprints are becoming available.
As portfolios, programmes and projects deliver transformative change and achieve strategic objectives, we should leverage them to support our organisations' sustainability vision. We can easily set up our portfolios, programmes and projects to support this change and adequately address our sustainability ambitions by covering three steps:
Projects that support sustainability are not as complicated as we might think. They are the same as traditional ones and have an additional requirement: to address environmental and social dimensions and goals. As with any other initiative, it is essential to define project requirements at the start that support its strategic goals.
Having defined environmental and social goals, we conduct an impact analysis to consider their qualitative and quantitative importance. This analysis should encompass the whole lifecycle of the solution, service or product created by the project. This is because environmental impacts should be looked at holistically, as some products may be efficient in their lifespan but become toxic at their end of life stage.
Carrying out this analysis is crucial because it will prioritise pressing issues, long-lasting impacts and effective options to optimise the investment. In short, it will help us select the "low-hanging fruit" and most impactful solutions while discounting the "nice to have" options that might otherwise dissipate the attention of the team, dilute their efforts or significantly increase the cost of the initiative.
For example, real estate developers include energy efficiency requirements in their specifications. These are factored in from the project's inception through to its design and construction. A large proportion of a building's energy consumption goes to HVAC and lighting. As such, real estate developers may decide to prioritise the efficiency in design for these, to build an energy-efficient building with a lower cost of ownership.
The first step is usually to enhance the building shell insulation, window to wall ratio, and crossed ventilation, as these will naturally improve lighting, ventilation and indoor temperatures. An initial investment on these features will minimise expenditure in HVAC and lighting appliances, reducing future maintenance cost and potentially avoiding electronic waste when appliances need to be replaced. It will also reduce the electricity usage for years to come, optimising the building throughout its lifecycle and reducing its carbon footprint.
In the same way that IT security experts are involved in the design and sign-off of IT solutions, stakeholders responsible for the sustainability agenda of the organisation should be appointed at the outset of the project. Sustainability officers, EHS managers or consultants could be part of this group. Their role is vital, as they will define the right requirements and that the products are delivered appropriately. They will also play a part in the User Acceptance Testing process and confirm that the environmental and social acceptance criteria, including compliance with regulations or industry standards, have been validated. That makes them the guardians of the sustainable development aspects of the project.
In the final phase of the project, this group of stakeholders will develop comprehensive user manuals and ensure that new users are trained to sustain the long-lasting environmental and social benefits. This phase is sometimes overlooked or rushed if sponsors are keen to cut cost and project teams are already moving on to the next challenge. Therefore, project teams should keep an eye out for this and allocate sufficient time and resources to the final stretch. This will ensure that the sustainable features of the products, which often depend on users’ ability to operate them, are exploited.
Sustainability has become a key concern in today’s society. Buyers are considering their carbon footprint when making purchase decisions. Directly engaging with customers, potential customers and consumer groups will help us to understand their needs and aspirations better and design the right products for them. This direct engagement will also allow us to communicate on our sustainability vision, which may contribute to brand value and public trust.
When engaged from the start, this consumer voice will contribute to the optimisation of the project’s requirements to deliver the right product features. Keeping them involved during the whole project’s implementation will support a smooth delivery and product launch.
Decarbonising our economy to limit global warming is not a choice; it is something that we must do. As responsible corporate citizens, companies and organisations must play their part. Sustainability must be embedded in the strategic objectives through the projects that are selected and how they are delivered. PwC has both the competence and experience to support companies in meeting this challenge and would welcome the opportunity to work with you making a difference.