David Lloyd, General Manager of Connected Energy Performance at Johnson Controls, discusses how the time for talk is over when it comes to decarbonisation – now is the time for action.
Scaling up for sustainability as deadlines loom is a challenge of huge proportions, but there is much cause for optimism as we work to unlock the benefits of a decarbonised world. Awareness of the value of ESG metrics is on the rise, with 93% of investors now considering the net zero agenda fundamental to their real asset investment decisions.
Climate action is now not only vital for our future on the planet, but is fast becoming a ‘must have’ rather than ‘nice to have’ for strategic success. Sure enough, we are now seeing businesses take note as they set ambitious public targets for decarbonisation. But where pledges are made, they must be supported by clear strategies for action.
With 2030 on the horizon, time is ticking to cut carbon emissions by 45%. To reach ambitious targets we need equally ambitious strategies for action. It’s about reimagining what is possible. And in a world where 40% of global emissions originate from the built environment, we need a buildings revolution that capitalises on the best people, processes and tech available. So, one question remains: how do businesses know which strategies they should implement to reach net zero, and how?
Simple switches – and the bigger picture
Investment into net zero initiatives is relatively new territory for many businesses. So, proving ROI to board members can be complex. Many organisations will not have implemented large-scale projects before, with no track record to prove payback. It poses the question: how can sustainability leaders increase confidence in green investment decisions without evidence of prior success?
The truth is that energy reduction and optimisation will aggregate positive effects quickly. Improvements to technology can start from local solutions – for example, switching from gas boilers to air source heat pumps, installing solar panels, and implementing LED transformation. These simple switches can translate to a 50% reduction in cost, with on-site energy production and the use of LEDs able to offset the increase in electricity use.
Investors and business leaders alike can take comfort in seeing these short-term gains. New technologies – such as heat pumps – can deliver CO2 savings of up to 70% in comparison to traditional electric heating. And where legacy infrastructure is updated, smart buildings can aggregate data to build a picture of likely cost savings in the long-term.
Ascertaining the right path to net-zero can seem overwhelming when faced with such a wealth of technology – especially when every building has different needs. Here, leaders should seek out insights from expert partners who will be able to determine what is realistic for their organisation specifically and map out exactly what the route to decarbonisation will look like.
Outlining zero-carbon goals across entire organisations
Digital technologies play a pivotal role in forming a detailed picture of an estate’s carbon footprint, enabling the energy needs of factories, warehouses, and offices to be tracked and monitored. Knowledge is power – a wealth of data ensures the unique needs of every building are clearly understood. Thus, feasible net-zero plans become far easier to create and implement. AI platforms transform the way in which we view buildings, making it easy to scan across entire estates to pinpoint inefficiencies and advocate the corrective action needed to fix them.
One way the route to decarbonisation can be accelerated is by utilising ‘single pane of glass’ digital platforms. These enable businesses to keep a close eye on expenditure whilst meeting green goals; optimising building performance whilst ensuring cost savings. In addition to this, with the regulatory demand to report on Scope 1, 2 and 3 emissions becoming increasingly pressing, technologies for visualisation are essential. Reporting on, and perceiving the complexity of, such emissions can be a challenge without the help of digitisation.
Education will unlock truly effective net-zero initiatives.
Many businesses have started to move towards science-based targets such as B Corp certification and CDP scoring, but still need to make more significant steps towards strategies that are fully integrated. For example, the immediate ROI to reduce bills amid the energy crisis by turning down heating appears beneficial on a base level but has minimal impact on wider net zero initiatives. So, clarity in direction, as well as education on what truly progresses the net zero agenda, will ensure effective implementation of long-term strategies.
There are immediate changes businesses can make, too. Innovations such as Central Utility Plant (CUP) technology use predictive algorithms to anticipate future scenarios and identify opportunities for cost reduction. Lack of education means that many businesses simply aren’t aware of the ‘quick wins’ that are available to them.
Successfully implementing green initiatives is complex. Truly laying the foundations for change involves the creation of detailed action plans that match pledges made. For example, available specialists in the industry will encourage board-level investment, but such creation of talent takes time. The World Economic Forum’s Future of Jobs report found that in demand skills across jobs are changing, with 40% of workers requiring up to six months to reskill. One thing is clear: change needs to happen now rather than later.
Filling the green skills gap
Companies have started to drive forward upskilling and reskilling initiatives amid an abundance of skills gaps and shortfalls in headcount. Increasingly, organisations are looking to recruit staff with demonstrable expertise in sustainable engineering and ESG compliance. The burgeoning need for skills in specialised areas such as heat pump and solar technologies is ever-increasing.
For wide-reaching organisational change, enterprises need industry expertise that is embedded in their workforce. Businesses face pressure as growing demand for experienced consultants and auditors exceeds supply. And, designing achievable goals for the environment as well as the business is no small feat when they are in the dark. Then, once new technologies are installed there exists a lack of experienced engineers to build, monitor and maintain necessary systems.
So how can companies instigate these changes in meaningful ways? They need to adopt ways of working that are company-wide, reviewing processes in full to facilitate practical delivery. Further to this, they must ensure workforce buy-in. With buy-in, as well as the right tools and information at their disposal, employees will be equipped with the tools to drive forward success in any transitional programme.
The demand for green talent is only likely to grow given that the UK’s net zero economy is expanding exponentially. It is currently valued at £70bn; and will likely exceed this value in future, a recent report has found. The report also observes the need for talent across the UK; particularly if the levelling up scheme is to be achieved across key UK regions and cities. The recruitment of top green talent, as well as investment in learning and development for the future, demands a pre-emptive approach. Leaders don’t have to make this transition alone. They can consider partnering with organisations that are already ahead of the talent curve.
Bringing it all together
So, what is truly needed to successfully drive the net zero agenda forwards? First and foremost, it is vital that businesses start to implement emerging technologies now to reap both short-term and long-term benefits. Rich data allows a building’s energy usage from a macro level to be fully understood and allows leaders to make strategic decisions that are driven by a wider net-zero agenda.
Secondly, closing the green skills gap will allow businesses to draw out achievable routes to net zero, implementing and maintaining new technologies for years to come. Finally, as leaders navigate this ever-evolving landscape, collaboration will be key. By working together with industry partners, businesses can find the most cost-effective and climate-friendly solutions to suit their needs. With the right people, processes, and technology in place, leaders can deliver net-zero strategies with longevity for generations to come.
