Leading sustainable businesses know that policy change on emissions is coming, and they are trying to get ahead of it by establishing a decarbonisation strategy and understanding how to implement it. Those who wait until 2050 are exposing themselves to policy risks, costs and missed opportunities.
As part of our new report, Why wait to pursue net zero? Build a sustainable business model now, we interviewed Uday Senapati, Executive Director, Corporate Strategy and Product Management at Lotus. Here, he tells us why companies need to create partnerships and economies of scale if we are going to meet global net zero ambitions faster.
If you believe in climate change, then you realise that we all have a bit of responsibility for making things happen quicker and turning the tide on climate change. We might not get there right away, but if we give it our best push - and even if we are 80% there in a decade - that is better than waiting until 2050.
When I see some companies’ goals, they are very long term and I think they can quite easily be pulled forward - especially if they enter good partnerships. So, let’s do what we can in this decade.
The first milestone for us was getting into a partnership with people who understand what a net zero ambition could look like, how to plan to achieve it, and how to do that in a cost-effective way. We found all that in the partnership with Centrica. It is on that journey to net zero itself, Centrica outlined its own plan extremely well - so it is in a very good place to help us get there faster.
The second milestone is to figure out what our net zero ambitions would look like. Companies in the automotive sector are trying to do this as a long-term plan, but we wanted to get there much quicker. We are now working through the details of what that journey to net zero will look like. And then we will be creating a very detailed plan for our upstream and downstream activities: design sourcing, supply chain, logistics, manufacturing, industrial footprint, products and customers.
The third milestone is laying out that roadmap and potentially announcing our net zero ambitions this year. The COP26 event this year puts a special focus on companies from the UK, like ours, and their willingness to support that journey.
The last milestone will be achieving our goals by working together. Everyone needs to start realising that we cannot do this all by ourselves: only very few of the big players might be capable of that. So, the best thing is to get partnerships going and helping each other get there. That will be the spirit going forward. Working with others is quicker, because when more people get together you get economies of scale and technology becomes more cost effective. You get double the benefits, in my view: you can reach net zero faster, and it might cost you less. But there is still a huge amount of investment we are putting into our organisation to achieve this.
Not every investment will have a return on it, but it depends on how you define ROI in this context. We firmly believe that there will be an intangible ROI in every penny that goes into the steps towards net zero. There will be legislative changes that could add cost, and there will be economic benefits of increasing and enhancing your customer base by achieving sustainability goals. There is a lot of tangible ROI as well, but it is harder to ascertain the intangibles.
On some of these journeys, you have to proceed with a bit of faith - rather than having every calculation in place. Our majority shareholder, Geely, has massive ambitions about being technologically one of the most advanced companies, and has recommended that all the brands that sit under the Geely umbrella work towards that.
We are on a journey of growth, investing in our facilities, our supply chain and our products. We consider sustainability goals as part of the investment now, because it will be much harder to do it later. A better way of calculating the ROI is to ask: what opportunities will you lose if you do not act now?
To find out more about how sustainable business leaders are balancing the demands of planet and profit, download our new report: Why wait to pursue net zero? Build a sustainable business model now