Climate is no longer just a crisis of science, but of leadership. There is a new urgency—entire industries are at a crossroads where they must transform, reinvent themselves, and remain competitive in a net zero world. The consequences of inaction have rarely been more dire.
Look no further than the United Nations’ Intergovernmental Panel on Climate Change report, known as the “now or never” report, for its urgency, and its projections that the world ahead will be different because of the sustainability crisis. With a changing climate, social inequity, complex value chains, and regulatory transparency, CEOs cannot afford to get too singular about climate. The time to act is now, and it will be key for leaders to act in the context of these wider challenges (often understood through environmental, social, and governance (ESG) criteria) to ensure a just transition.
Sustainability and environmental impact have become top of mind for executives across the world, with many starting to prioritize sustainable changes to how they operate. In a recent survey, 74% of executives believe sustainability can drive powerful business transformations.
But executives need help—65% admit that even though they want to advance sustainability efforts, they don’t know how to actually do it.
There’s no doubt that this call to action comes at a difficult time for business leaders—as they grapple with uncertainty about the global economy, geopolitical instability, and significant strains on their existing business model. They are damned if they continue with business as usual and they are damned if they fail to transform.
So how should leaders respond?
What’s needed is company-wide transformation at a scale large enough to pivot entire industries. This leadership responsibility and opportunity must be three-pronged.
Lead your company
Lead inside the organization with changes in practices that challenge leadership, reach every employee, and identify the greatest areas of action. Leaders are starting to take action—based on a survey of 1,200 CEOs, Accenture has found that more than 70% of CEOs are actively working to develop net zero emissions targets for their company. But we have a long way to go. Sustainability needs to be at the core of your business, integrated into strategy, technology development, and employee engagement. Sustainability leadership can look different at every organization, and there are several different approaches to fighting climate change. Having different perspectives and bringing everyone along is key to addressing this global challenge.
Lead your industry
Lead in your industry by building common metrics, being transparent, remediating the supply chains, and strengthening relations with regulators. It is vital for leaders to work at an industry level to ensure new, sustainable models are adopted and successful. Sustainability is a data problem. Better visibility into data is imperative so that companies can make more informed, impactful decisions. My company, Google Cloud, works across the industry on best practices, has opened up the platform for innovation, and offers educational resources like Sustainable IT – Decoded, a masterclass created in partnership with Intel, that shares the expertise of sustainability thought leaders.
Lead the world
Lead in the world, knowing that corporate climate action goes beyond the four walls and into everyday life, every decision. Estelle Brachlianoff, COO of Veolia, has spent literally decades championing this agenda and has a fantastic list of awards to prove this—she encourages us all that “we have before our eyes the solutions for the world of tomorrow. So let’s replicate them, let’s deploy them.” Leverage tools like Your Plan, Your Planet from Google, the California Academy of Sciences, and the Ellen MacArthur Foundation that uncover how you can reduce food, water, and energy waste, and learn about the circular economy.
Related: The first carbon-neutral utility
This transformation is possible. We have the know-how, tools, and technologies. Look at Ørsted–in 2006, it was known as Dong Energy and was one of the most coal intensive power generators in Europe. In a decade, Dong transformed itself into Ørsted, a green energy company developing and operating wind & solar farms and energy storage & bioenergy plants and providing energy products.
Ørsted ranks as the world’s most sustainable energy company by Corporate Knights, and HBR ranked its transformation as one of the top business transformations of the past decade. Most importantly, Ørsted’s transformation reduced CO2 by 86% while doubling its operating profit. Key success factors for their transformation include CEO vision and leadership particularly committing to highly ambitious targets, dramatic advances in technology especially reduction in the levelized cost of renewables, and working with their ecosystem partners.
Leaders are facing many competing priorities, but climate change is one that impacts us all and requires taking measured risks. More than two-thirds of executives believe that technology is critical for their future sustainability efforts, attesting that it helps transform operations, socialize their initiatives more broadly, and measure and report on the impact of their efforts. When it comes to solving a problem as big and urgent as climate change, we need strong leadership and authentic collaboration to make the progress that we need to see.