David Williams, Vice President, Transactional Business, UK & Ireland, at Schneider Electric, argues that achieving Net Zero is ‘a whole company initiative’, and that businesses and other organisations – including healthcare providers – serious about their carbon reduction efforts will likely need to invest in a combination of technologies and processes that work together to manage energy use. He warns against procrastination, saying ‘the time to act is now’.
Forget 2050: we will know where we are in the fight against climate change by 2030. To stand a chance of meeting commitments to limit temperature rises to 1.5 °C by mid-century, experts agree that we must halve global emissions in just seven years’ time.
Yet the recent energy crisis, sparked by the post-pandemic economic rebound and the conflict in Ukraine, is hindering progress towards Net Zero goals. Record high prices for gas and electricity have had knock-on impacts on operations, pricing, profitability, and more.
This explains why business leaders have been focused on combating what they perceive to be more immediate challenges, such as economic pressures, supply chain delays, and skills shortages. Our research shows that 85% of UK and Irish business leaders in healthcare admit that the energy crisis will affect their ability to meet decarbonisation targets. This is in stark contrast to boardroom ambitions on tackling climate change: 87% of the healthcare organisations we surveyed have Net Zero plans in place, and 42% believe that climate change and Net Zero ambitions will become more of a priority over the next three years. Yet despite their best intentions, business leaders are not fully committed to their decarbonisation goals – a worrying setback for both the climate and for business. Moreover, 50% of healthcare leaders are finding it difficult to get board-level buy-in to tackle the energy crisis
A difficult balance to strike
Our research findings highlight the fine balance that needs to be struck between addressing immediate threats while preparing for future ones. Although few in the boardroom will argue against addressing climate change, kicking the climate ‘can’ down the road won’t just impact broader efforts to address climate change – it doesn’t make business sense.
As energy market volatility becomes the new norm, delaying decarbonisation goals will present organisations with new business risks associated with fluctuating energy prices and extreme climate events. Businesses that continue to address their carbon reduction ambitions, however, will see tangible benefits in terms of lower costs and greater efficiency.
The good news is that practical steps can be taken now to get businesses back on track and reap the added benefits of embracing automation, digitisation, and sustainable technologies. These benefits include reduced exposure to variable energy pricing, operational efficiencies through automation, electric vehicle cost savings in low emissions zones, phasing out dependence on finite fossil fuels and the futureproofing this creates, and the reputational benefits of being more sustainable
When getting started, lower cost, ‘quick win’ measures can deliver immediate benefits for businesses, helping leaders to obtain crucial stakeholder buy-in for longer-term projects. Indeed, once the wider benefits of being carbonneutral become clear to senior decisionmakers, Net Zero will rise up boardroom agendas once more. A good starting point is to create a strategy that aligns with your business plan, considers the entire lifecycle of power generation, and involves collaborators from across the business.
A company-wide initiative
Achieving Net Zero is a whole company initiative. Involving key stakeholders – from leaders to operations managers – from the outset will ensure that your plan has a widespread impact, and that accountability for its implementation lies with multiple functions. There isn’t a silver bullet for decarbonisation. It’s likely that you will need to invest in a combination of technologies and processes that work together to manage energy use. Understanding this from the outset will enable you to assess vendor solutions critically, and set stakeholder expectations on results.
You’re an expert in running your organisation: invite Net Zero experts to analyse your current plans and results to help you identify areas for improvement, and develop a comprehensive plan underpinned by your business goals and operational efficiency. Sustainability partners can provide end-to-end digital solutions and services to help you determine which solutions you’ll need – and getting started can be as simple as booking a remote energy assessment.
Facilitating a more effective transition to Net Zero
For example, Schneider Electric acts as both a sustainability enabler – supporting partners and customers with our digital solutions and services, and a sustainability practitioner – leading in ESG, and committed to becoming Net Zero across our end-to-end value chain. In other words, the business is relied upon to advocate and support Net Zero initiatives across its network of partners and customers. We work collaboratively to share best practices and knowledge to facilitate a more effective transition toward Net Zero.
The great news for business leaders today is that investing in decarbonisation technologies and solutions not only makes business sense – it also doesn’t have to be expensive. The payoff can be significant for your operations, efficiency, resilience, and competitiveness – and can often be measured in months, rather than years. With careful forecasting and planning, you can invest in Net Zero initiatives that deliver a mix of immediate and long-term results
For many leaders, procrastinating on their Net Zero commitments now will hinder future growth. In fact, decarbonisation is expected to deliver US $26 trillion (£22 trillion) in economic benefits to the global economy through 2030. There’s never been a better time to get back on track with Net Zero.
While the UK Government’s recent postponement of the phase-out of combustion engine (ICE) vehicles and gas boilers to 2035 has gained much attention, Prime Minister, Rishi Sunak, made it clear at the time that the Government remains committed to Net Zero. Indeed, announcing the changes on 20 September last year, he reiterated the need for action, quoting the Climate Change Committee by saying, ‘you don’t reach Net Zero simply by wishing it’. Action is essential.
At Schneider Electric, we continue to see strong indications from businesses in the UK and Ireland that trends towards electrification, automation, and digitisation in service of Net Zero are not slowing down. This is important, for if the world is to meet commitments to limit temperature rises by mid-century, we need to halve carbon emissions by 2030 – and healthcare providers will play a vital part in achieving this target. With just seven years on the clock, it’s critical that organisations get back on track with Net Zero activities now.
Some key actions to take
Here are some practical and cost-effective ways to accomplish this.
1 – Start with a Strategy
Net Zero is a whole organisation initiative, and this will be reflected in your strategy. Aligning it with your strategic plan will reap top and bottom-line benefits from your Net Zero projects. Decarbonisation won’t live in a silo, with just a single team accountable for its success. Instead, it will be seen as everyone’s responsibility and, better still, its rewards will be felt by every department.
Reducing carbon emissions is a byproduct of having well-run operations across the organisation, so focusing on energy management as a whole can help your organisation achieve Net Zero while reducing energy use, lowering energy costs, and building resilience.
2 – Broaden your mix of solutions
It might feel counterintuitive to invest in a broader range of projects and solutions if your organisation is feeling the pinch, but having a mix of Net Zero initiatives underway will compound the benefits, while ensuring return on investment both over the short and long term.
3 – Challenge your perceptions
There are some common misconceptions associated with reducing emissions. The first is simply tackling direct emissions, rather than considering the entire lifecycle of power generation for your organisation. If you don’t consider this, you risk missing a vital opportunity to improve costeffectiveness and efficiency in the future.
Many leaders assume that having a Power Purchase Agreement (PPA) in place means that energy costs are under control. However, given the limited duration of these agreements, rising energy costs for finite fossil fuels will eventually impact your business, whether you have a PPA in place or not. Ultimately, switching to more sustainable energy sources will pay off in the long run as fossil fuel supplies dwindle.
Many stakeholders believe achieving Net Zero is expensive – but it doesn’t have to be. With clever planning and forecasting, you can build a Net Zerostrategy suited to your operations, budget, and timeframes. The technology is already available to help you accomplish your Net Zero ambitions – and the pay-off on these is often measured in months, rather than years.
4 – Communication is key
Decarbonisation can offer many benefits – from energy and cost savings to greater resilience against energy market volatility, a boosted brand reputation, and better competitiveness in a sustainability-focused market. Communicating these benefits to your stakeholders and employees, while demonstrating a clear return on investment, will help you obtain the buy-in from leaders and colleagues you need to implement Net Zero plans.
That said, it’s worth setting expectations at the start of your Net Zero journey. Some sustainability projects are longterm investments, and may not deliver immediate returns. Understanding this will help ensure that decision-makers do not immediately discount anything with a long-term payback. It helps if your plan also includes some short-term projects that offer immediate returns.
5 – Get expert advice
It’s understandable if you feel overwhelmed by the task at hand, or don’t know where to start when developing your Net Zero strategy. That’s where expert advisors can help. External consultants can support you in understanding the practical actions and investments needed to meet your Net Zero goals on time, in assessing current solutions and strategies, and in identifying improvement areas
With time fast running out to meet global carbon targets, we cannot afford to waste any more time. With other priorities on your plate, it may be tempting to delay decarbonisation for the future, in the hope of a better economic climate, more favourable energy market, or a more engaged workforce, but procrastination will only hinder your business’s long-term growth and success. Starting now, even with a handful of low-cost measures, will help you benefit from reduced energy consumption and costs. Such benefits will compound over time, chipping away at your Net Zero goals, and de-risking your operations. There is a great opportunity to achieve Net Zero and improve your resilience and efficiency as a result. It’s up to you to embrace it today.
David Williams
David Williams is Vice President, Transactional Business, UK & Ireland, at Schneider Electric. He leads the company’s Home & Distribution and Power Products businesses to support the end-to-end needs of customers and channel partners across the UK & Ireland zone.
Since joining Schneider Electric in 2011, he has honed his skills across a variety of business units, including Solar, Smart Buildings, Digital Power Solutions, and Power Products. Prior to taking up the role of VP of Transactional Business at the start of 2023, he was VP of Marketing, with a remit that included setting and executing business and marketing strategy, driving employee engagement, and managing commercial activities across the UK&I zone.