Thankfully, twenty years on, the policy, business and finance communities are making progress towards Net Zero, with 93% of global GDP now covered by Net Zero targets at a country level, according to Net Zero Tracker. That said, transition planning to achieve Net Zero is painfully slow and will fall short of meeting targets unless we shift gears quickly.

In my time at the Carbon Trust, I’ve been fortunate to work with a diverse portfolio of high profile private and public sector organisations, across different geographies and industries. I’ve learned from our clients and partners about the challenges they face in their journey to Net Zero, and understand first-hand how difficult it is, but know through collaboration across sectors it can be achieved.

A few of my key learnings are outlined below, a starter for five at least, which I hope helps to inform and accelerate the work we do with our clients and partners going forward.

1. It is the market that will build a Net Zero economy

While political leaders set the framework for action, it’s the private sector that will build a Net Zero economy. Having said that, the picture across sectors and within sectors is mixed. Some sectors and businesses see it in their direct interest to progress their transition to Net Zero faster, where the challenges are more straight forward perhaps, for example in professional services. For others, the transition path is often seen as riskier, potentially because technologies are not yet proven at scale, as is the case with sustainable aviation fuels.

Increasingly we are working with organisations to define, plan and make the business case for a strategic transition to Net Zero. We expect this trend to accelerate with the rise in reporting standard requirements, such as the EU’s Corporate Sustainability Reporting Directive (CSRD) put into effect earlier this year, but also driven by businesses seeing the long term commercial and competitive advantages of accelerating their progress to Net Zero.

2. Organisations need to plan and deliver their transition to Net Zero now

We have reached the point where business as usual is no longer an option for companies. To be successful going forward, companies need to fundamentally rethink their business models, product portfolios and supply chains so that they are aligned with the Net Zero world. This also requires simultaneously planning and delivering on their transition to enable a continuous cycle of learning to optimise plans and accelerate efforts. As transition planning is critical to achieving Net Zero, it’s a key area of focus for us in our work with clients and partners. For further insights on the subject please see: Climate action and Net Zero transition planning | The Carbon Trust

3. Collaboration is key between private and public sectors

Developing and executing a robust Net Zero transition plan is hard. We know this as this is what we do every day with our clients and their supply chains. We also have our own Net Zero plan to continuously drive forward (testing, learning, optimising) to achieve our organisation’s set targets. Knowing how difficult this is, we are advocates for collaboration and sharing appropriate learnings within and across sectors to help accelerate progress.

Organisations coming together to collaborate, particularly around reducing cost and scaling new technologies, is the right way to go. As an example, the Carbon Trust’s Offshore Wind Accelerator is a collaboration across multiple major energy companies that has materially reduced the cost of offshore wind. Going forward, we will be working with sectors to launch similar collaborative initiatives to accelerate progress where we can.

4. Political leadership plays a significant role

It is great to see new climate leadership from the incoming government here in the UK. Since the Climate Change Act, while there have been ups and downs, there has been broad consensus across the major UK political parties that it is in the UK’s interest to be a leader in climate action.

We are also seeing strong leadership on the transition to low carbon economies from other major markets such as China, the US and the EU, who see the economic opportunity in terms of high value jobs and stronger growth, as well as the major risks to citizens, and health and prosperity if we don’t manage to keep global temperature rises below 1.5 degrees.

Looking at other markets where the Carbon Trust operates, there are also encouraging signs such as the new government in South Africa accelerating progress on renewables. In Latin America and Southeast Asia, we are increasingly working with governments on how to evolve the policy framework to accelerate climate action, and with businesses to capture green growth. As ever, the politics is not all plain sailing as we are seeing with the upcoming election in the US. While there are still challenges, there is real momentum now, albeit too slow.

5. There will be winners and losers in the transition to Net Zero

The winners will be those organisations that really understand the challenges and opportunities by collaboratively engaging with key stakeholders, from employees, suppliers and consumers to investors, industry bodies and governments, enabling them to plan and execute strategic change for their businesses in a structured and comprehensive manner.

Leading companies are already acting and positioning themselves to be winners. However, there are still too many organisations hoping to be fast followers when the transition path for their sector becomes clearer and easier. It’s a dangerous strategy both for the world in terms of climate, but also for the business’s medium to long term financial success.

In a rapidly changing world, businesses and their shareholders, employees and suppliers are best served by embracing, shaping and driving the required changes. We have seen this cycle playing out many times in the past where some companies try to fight against the tide of change, only to regret not taking earlier and bolder action as their competitors succeed with new business models and approaches.

Over the coming months I will be sharing further thoughts and insights and welcome others to share their learnings and experience to help us accelerate our work to a decarbonised future.