We should all be on the race to net-zero

We should all be on the race to net-zero

As Earth Day dawns first on the Pacific islands, then New Zealand and Australia, and then progressively around the world, it is timely to raise again our ambitions for a net-zero world.

 Government leaders globally have committed to, or are progressing towards, a society that has a net-zero climate impact by 2050.  

 This looks different in every country, each with a different starting point, but a number of themes hold true everywhere:

·       Technology will be critical, as we estimate mature existing technologies and recently-adopted technologies (if scaled) are able to support two-thirds of the change required for a global ‘net-zero CO2 by 2050’ goal. Of course, this requires significant policy and business-model change to happen too, including stabilising electricity grids fed with a high degree of intermittent renewables, as well as action on other greenhouse gases

·       Innovation and investment will be critical, as one-third of the CO2 ‘emissions reduction gap’ to net-zero by 2050 will need to come from technologies like large-scale hydrogen, or solutions we have yet to prove at scale like sustainable aviation fuel. Funding and financing also matters, as the scaling of technologies today requires up-front cost for later gain, and the driving of innovation requires experimentation from the best minds and backing from those who would invest in tomorrow.

·       Collaboration and planning will be critical. Transforming a company, NGO or government agency is hard, but transforming entire value-chains and supporting job-creation with multiple business model changes, is incredibly hard. Companies, governments, NGOs and communities will all need to collaborate and plan carefully to advance multiple different solutions in every geography, as there is no silver bullet, and the burden of transition will fall differentially if not planned through. There will be many failures along the way, and so a portfolio of efforts will be required to hit the goal, even if we don’t know which individual effort will be the most successful.

·       Cost is manageable in aggregate, but complicated in practice. BCG research last year showed that full decarbonization of the world’s major supply chains would incur only a 1 to 4% cost increase for end-consumer products, which feels a small price to pay for stabilising the climate and avoiding the large expected GDP per capita losses from unmitigated climate change. However, costs land differentially across the economy, so this must be managed.

 Australia and New Zealand lead the world on some dimensions, but in other areas there is a long way to go. Between both countries there are a number of reasons why bold climate outcomes, including net zero, should be achievable by 2050 across all greenhouse gases:

·       Both countries are at the advanced end of the technology and innovation spectrum, with abundant renewable energy sources. We can also contribute to technological innovation that helps other countries reduce emissions in making products that we in turn import;

·       Deep private capital pools are looking for ESG-conscious investment, and government disciplines are suited to well-thought-through public capital investment; and

·       Collaboration and planning across domestic value-chains and cost-mitigation should be more possible in markets and populations of our size than elsewhere.   

 

What can each of us do? Some companies face enormous change, while others can go faster. Those who can move fastest will likely drive competitive advantage that is both sustainable for themselves, and more sustainable for the planet. Either way, companies and governments should set interim milestones and timelines for themselves on the journey to net-zero. For BCG:

·       We announced last September that BCG aims to reach net-zero climate impact by 2030 by reducing its carbon footprint and permanently removing any remaining emissions through nature-based and engineered solutions.

·       In March we set up the global BCG Center for Climate & Sustainability, bringing together many hundreds of climate and sustainability experts across the firm, with thousands of BCG experts in industry-change

·       We are the Consultancy Partner of the 26th United Nations Climate Change Conference of the Parties (COP26), which complements other BCG partnerships such as with WWF (World Wide Fund for Nature) and CDP (Carbon Disclosure Project).

·       In each country we look to work with business leaders who also seek to enable net-zero economies, as well as support global efforts such as BCG’s recent work on ‘Aligning on Net-Zero’ with the World Economic Forum

The path to a stable net-zero climate-impacting economy will be a journey full of challenges and surprises, twists and turns, but one we must hasten on everywhere, now.  

  

Kate O'Keeffe

CEO & Co-Founder | Growth Hacker | Techstars 2024

3y

Great piece Anthony Roediger. Inspiring.

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Nina Johansen

Cyber, Technology & Climate Risk

3y

Great to see this strong commitment from BCG Anthony with an acknowledgment of the complexities

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James N.

I bring people together. That makes me a connector.

3y

Here here Anthony Roediger

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