Guidehouse report examines obstacles in decarbonization journeys of multinational
corporations, offers strategies to achieve sustainability in a carbon-free future
Guidehouse recently released a new report detailing the critical role multinational corporations must play as the world moves toward a carbon-free future.
While the call to decarbonize is clear, large corporations often face a web of overlapping challenges when getting started. The report, Navigating the Decarbonization Journey, explores these challenges and offers success strategies for corporations looking to transform their operations as quickly and as profitably as possible.
"Decarbonization is an economic imperative for multinational corporations. Investors expect it, regulators require it, and customers demand it," says Britt Harter, Guidehouse's sustainability lead and partner in the firm's Energy, Sustainability, and Infrastructure (ES&I) segment. "It is clear that senior business leaders cannot afford inaction, but as corporations dive into their sustainability pursuits, often several key obstacles emerge that threaten to delay or derail their progress."
According to the Guidehouse report, these barriers include a lack of subject matter expertise and technical proficiency, challenges in shifting to circular business models, disparate data sets, supply chain complications, high capital requirements, and an urgent need to align with evolving business principles, including agility, circularity, connectedness, transparency, operational efficiency, resilience, and social equity.
Despite the challenges, the need for global emissions mitigation and adaptation has become increasingly concrete. According to the report, in 2019, the world's 215 biggest companies reported $1 trillion in climate-related risk in the years ahead. Record-breaking natural disasters in 2020, including historic wildfires, floods in China, and more North Atlantic hurricanes than ever before, contributed to $210 billion in losses worldwide. In addition, a 2021 Dutch court ruling requiring Royal Dutch Shell to reduce emissions 45% by 2030 confirmed that climate-related risks can take legal forms as well.
"The knowledge that decarbonization is inevitable is separate from a clear understanding of the discrete steps necessary to shift a complex, multinational organization into a new paradigm," says Jan-Willem Bode, leader of Guidehouse's Investors & Large Corporations practice. "The decarbonization of the business world is at once a collective journey undertaken as a corporate community and an often lonely and puzzling path for individual companies. The more connected and transparent the global business environment becomes, the more agile, efficient, circular, resilient, and equitable companies across all industries can be."
For more information, including case studies from multinational corporations that have tackled their sustainability challenges, download Navigating the Decarbonization Journey: Success Strategies for Multinational Corporations Transitioning to a Carbon-Free Future.
SOURCE: Guidehouse
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