Deloitte: Can industry achieve carbon-free targets by 2030?
One of the greatest challenges facing energy and resources (E&R) industry sectors is the drive towards decarbonisation. The latest report from Deloitte – The 2030 Decarbonization Challenge – suggests how chemical, oil and gas, mining and metals, and power, utilities and renewables sectors can react and achieve meaningful targets over the next decade.
The reports states that the top four drivers of decarbonisation are:
- customer, employee and community demand
- investor pressure
- policy and government targets
- technology and operational cost reductions
Many E&R companies are announcing goals to reduce emissions, utilise renewable energy, and address climate-related risks as pressure mounts to address these drivers.
In a Deloitte global survey, 89% of E&R executives said they either already had a plan in place or were developing a strategy to reduce reliance on fossil fuels, with 30% of those executives already having a fully developed plan in place.
Some companies are mainly responding to government targets, but others see the energy transition as an opportunity to transform themselves.
"Energy transition is anchored in long-term trends, which is likely to make it able to withstand current economic headwinds,” says Kevin Guo, Deloitte China Energy, Resources & Industrials Industry Leader.
“As this energy transformation or 'Green Deal' gains momentum, new ecosystems are forming and new technologies are emerging. These developments are helping to grow renewables, develop new energy carriers, improve energy efficiency, reduce emissions and create new markets for carbon and other by-products as part of a more circular economy."
The challenges of decarbonisation
Decarbonisation is not without challenges. Many steps, such as increased electrification, wide-scale use of renewables, and energy efficiency all have their issues.
"Decarbonisation is an opportunity to transform,” says Allan Xie, Deloitte China Climate Change and Sustainability Service Leader.
“For companies pursuing these goals, it requires shifts in how they source, use, consume and think about energy and feedstock, and how they engage with multiple stakeholders. It also requires a substantial financial support from investors and governments. The energy transition also has sector-wide implications for how E&R companies interact with one other, and for how sectors themselves can combine and converge."
The report highlights potential pathways companies from four sectors can take.
Chemicals Focus on improving resource and energy efficiency to produce chemicals and materials using sustainable waste or bio-based feedstock, and avoiding production of virgin materials.
Oil and gas To satisfy investors and remain viable, transform business models by diversifying into other forms of energy and enabling technologies and turning Scope 3 emissions into a business opportunity.
Power, utilities, and renewables Decarbonisation will require a robust ability to manage and derive insights from data. Companies can look at applying advanced analytics and scenario modelling across the three main segments of the value chain: retail power, grid transmission and distribution, and generation.
Mining and metals The issue of decarbonization in mining requires partnerships and an ecosystem mindset. Companies need to set goals for their partnerships, trials they are conducting and solutions they are developing.
Four CPG giants to fund sustainable accelerator programme
Breakthrough ideas can come from anywhere and anyone. That’s the premise behind the coming together of The Coca-Cola Company, Unilever and Colgate-Palmolive in the funding and support of world-leading brewer AB InBev’s 100+ Accelerator program.
These four consumer packaged goods multinationals will leverage both their size and resources to fast-track a shift toward sustainable solutions by mobilising some of the world’s sharpest thinkers to solve some of the world’s most pressing sustainability challenges.
The aim of this collaboration is to “supercharge adoption of sustainable solutions by funding the accelerating fantastic innovations that will change the world by making all of our businesses more sustainable”, says Tony Milkin, chief procurement, sustainability and circular ventures officer at AB InBev.
“Sustainable business is smart business, and we are working to solve huge problems that no one company can handle alone. With our combined global reach, we can accelerate progress towards a more sustainable future.”
What is the 100+ Accelerator program?
Originally launched in 2018, 100+ Accelerator is a global incubator program that aims to solve key supply chain challenges across water stewardship, circular economy, sustainable agriculture and climate action.
It offers size and scale to passionate entrepreneurs to help bring their solutions to market faster, and the program’s first two cohorts have already piloted 36 innovations in 16 countries, with participating startups raising more than US$200m to help them scale globally.
Among the established innovators are those already creating huge impact on sustainability, with projects including the first solar thermal plant in Africa, recycled electric vehicle batteries that store renewable electricity in China, and upcycling saved grains from the brewing process to produce nutritious foods in the US.
- The implementation of green cleaning solutions to reduce water and energy use in brewing operations in Colombia
- Solutions delivering traceability and insurance for smallholder farmers in Africa and South America
- The collection of more than 1,000 tons of glass waste in Brazil
- Piloting returnable packaging in the United States
- Recycled electric vehicle batteries that store renewable electricity in China
- The ability to upcycle saved grains from the brewing process to produce nutritious foods in the United States
- The first solar thermal system to be installed at an AB InBev plant
How will the new program work?
So, how does it work? Applications are invited from entrepreneurs or small businesses (deadline for cohort 3 is May 31 2021) and the partners will choose 20-25 ideas which are then provided with funding.
Project aligned with goals of the CPG multinationals
The participation by all three consumer packaged goods giants is in line with each of their own sustainability goals, with each passionate about transforming global supply chains towards a greener future, and knowledgeable that “we can achieve our purpose faster and more effectively with equally committed partners”, says Patricia Verduin, CTO of Colgate.
Since launching its World Without Waste sustainable packaging platform, Coca-Cola has actively engaged the startup community for inspiration and innovation and is an inaugural investor in Circulate Capital, a fund launched in 2019 focused on ventures, infrastructure and innovations preventing the flow of plastic into oceans.
The program’s social inequality component is also aligned with Unilever’s values. “This year, we made commitments to ensure that everyone who directly provides us with goods and services receives a living wage by 2030,” says Marc Engel, chief supply chain officer of Unilever. But that’s not all. “We’re increasing our spend with suppliers from underrepresented groups and committed to train 10 million young people.”