Climate challenges require more impactful interventions

Translate climate challenges into tangible matters. Make it concrete, so that the challenge – but also the impact of what you do next – is easier to understand. The better you know where your impact is – both positive and negative – you can also make more impactful interventions. Renate de Lange, PwC's global sustainability markets leader, makes this call in relation to COP28, the 28th United Nations climate conference, which will take place in Dubai from November 30 to December 12.

From joint climate ambitions to more concrete actions

As PwC, we have a role to play in the social debate. And climate change is an important topic in it. That is why our chief sustainability officer Wineke Ploos van Amstel – Haagsma and I will be present at COP28 in early December. This conference bringing together public and private parties to share knowledge and expertise is an ideal time to turn joint climate ambitions into more concrete actions.

As an organization we have an important role to play in this, in our own business operations as well as in our services to clients. Because the challenges we jointly face are major. COP28 aims to accelerate the energy transition, transform climate finance and focus on the impact of climate actions on nature, biodiversity, people and quality of life. It must also be the most inclusive COP ever, by not only talking about developing countries, but also and especially with them.

Technology and climate are changing every business model

The time when we can quietly think about what the world will look like in five years time is over. In current times, in which developments follow each other in rapid succession, we must learn to create the path while we are already walking there. Technological developments as well as climate will drastically change every business model.

Many of our client conversations are about how we can ensure a resilient business model with which organizations make the world a better place and remain relevant in the long term. That is quite complex, as it often means incurring costs in the short term for long-term returns. What then do you choose? What horizon do you use? And how much space do investors give you? These are not easy choices for directors, especially with all the other matters on their agenda that require attention.

Nevertheless, we notice that better understanding of how climate change impacts their business model, is important to many CEOs and CFOs. Especially where to start with the transition to a sustainable business model. The question often is: what can we do now and to what extent do our efforts really contribute?

A well-founded decision for every climate action

The Corporate Sustainability Reporting Directive (CSRD), which will come into effect on 1 January 2024, will increase transparency about impact. But many organizations still see the CSRD mainly as a compliance requirement. While it is also, and perhaps even more so, an ideal guideline to gain even better insight into your business. Particularly in your non-financial performance, which ultimately allows you to make better interventions.

If you identify the topics which are most material for your company, tailor your strategy accordingly and then implement that recalibrated strategy, you will make progress. Especially if you then align your governance, parameters for success as well as reporting. And it doesn't have to be 100 percent perfect right away. Just try things and then iterate each time to make it better.

Translate climate challenges into tangible matters. Make it concrete, in such a way the challenge – but also the impact of what you do next – is easier to understand. Focus on the impact of climate actions on nature, biodiversity, people and quality of life, so that you can make an informed decision for each climate action. And prevents you from initiating a climate action that solves a short-term crisis, but creates a bigger problem in the long term. The better you know where your impact is – both positive and negative – you can make more impactful interventions.

Exchange blocking mindset for growth mindset

We often have the tendency to only start when it is perfect timing or we know exactly what will be the impact. Perfection often stands in the way of progress, but we can no longer afford that delay. Exchange that blocking mindset for a growth mindset. Look at new emerging countries for example, where developments are currently often moving faster.

Governments can encourage this by formulating laws and regulations in a way that facilitates and accelerates the transition. A balance between regulation and sufficient freedom for both private and public sector to find their way within it is desirable to avoid making matters so complex that they block feasibility.

More focus on demand side and consistent messaging 

Shifting attention from the supply side to the demand side is also a solution to speed up the transition. Anyone who talks about accelerating the energy transition, and therefore also about accelerating emissions reduction, is often referring to the EU&R sector. And how quickly that sector can transform from a fossil industry to a renewable industry. But is that the only solution?

In my opinion, there are 'two sides of the equation', but on the demand side too few parties currently see it as their responsibility. Not so much because they don't want to, but because they think it's 'too big to handle'. Adjusting the financing system to make it easier to obtain financial resources that facilitate the transition can also help.

Finally, what also helps is if at the end of COP28 we all have consensus on clear ambitions with a consistent message, actual actions and clear steps for implementation. If it is easier for everyone to understand: this is what is expected of me, this is how I can contribute, that way we can make important progress.