Anne Gray detangles what has jokingly been referred to as the “Alphabetti Spaghetti” of new terms in the second part of her blog.
Planning a route ahead
Legislation may be complex, but it is also necessary. UK and EU Net Zero deadlines are looming, and sector specific commitments helpful bring target dates further forward. Those who are leading the way through voluntary activity, such as M&S in the retail sector with its ‘no plan b’[1] approach, or the EV100 climate group in the fleet and transport sector set a good example, but the fact is that many more won’t act quickly enough without being compelled to do so.
It is vital that businesses learn to navigate regulatory requirements effectively, and the key starting point for that journey is to understand that one individual is not going to havevisibility across an organisation’s entire spectrum of net zero, let alone ESG, requirements.
Transition planning is more than just carbon reporting, but that is often the starting point. The process of reporting provides a lens on corporate commitment, requiring a mechanism to bring together inputs from multiple interested stakeholders, and multiple data points across the business. Stakeholder interests need to be galvanised by Board level commitment and reporting sign-off.
This process invariably has a secondary benefit too. By cascading CSR targets through the organisation to crystallise as granular, measurable KPIs, businesses create an opportunity to effect and drive positive change, business efficiencies and opportunities for growth and – with this – enhanced profitability. This transition from ‘have to’ to ‘want to’ strengthens leadership and can thereby eventually translate into class-leading excellence.
Learning the language
For many businesses, however, the understandable fear of either doing the wrong thing or of being caught out by fast-changing requirements acts as a barrier. A recent report from The Carbon Trust[2] highlighted such concerns among businesses with less advanced climate targets. This led the Carbon Trust to surmise that those in the earlier stages of climate action are ‘greenstalling’, indicating that they get stuck in a state of ‘analysis paralysis’, instead of taking decisive steps in the right direction.
Before reporting requirements can be met, they need to be understood. And then assets and activities need to be mapped and modelled. This requires a unified effort across internal stakeholders, and a process for arriving at actionable insights that can be used to drive the business forward. This requires commitment and an investment of time and resource from the top. Initially, though, it requires an acceptance that new models and methods may be needed to navigate businesses successfully towards a net zero world, and a belief that this could unlock benefits for the business, rather than an assumption of additional cost.
Government bodies, mandatory and voluntary schemes, frameworks, taskforces, protocols – the list (and accompanying acronyms) is seemingly endless. To help unpick this complex web we’ve provided a short glossary of key terms at the end of this piece Glossary of terms – Flexible Power Systems (flexpowersystems.com), but it will also pay dividends for businesses to understand key bodies and legislation affecting their specific industry. Climate Change Agreements[3] held with sector associations, such as the Cold Chain Federation, have helped to drive decarbonisation forward whilst rewarding participants, and continue through to 2025. In road transportation The UK government’s commitment to phase out production of all non-zero emission cars, vans and HGVs of 26 tonnes and under by 2035, underpinned by the Zero Emission Vehicle (“ZEV”) mandate, will catalyse the sale of non-zero-from-the-tailpipe vehicles through broader and stronger supply, leading to price competition.
Hitting the road
If parameters have been effectively established, stakeholders engaged, opportunities acknowledged and the right processes put in place, then net zero and broader ESG reporting and transition planning should become a natural part of business operations. Rather than being an onerous distraction, these processes – like any other sound business practices – should start delivering new financial and operational efficiencies across the organisation.
In many cases the ability to monitor and measure key metrics is already embedded within the business but some may need help to unlock that potential. Progress to decarbonised commercial fleet may well involve stakeholders across energy, fleet, property, finance, IT, operations and sustainability portfolios, each of which rely on systems.
In our work with fleet operators, FPS helps build confidence in – and where appropriate accelerate – the electrification of their commercial fleet. Our “Plan” solution gives visibility at a granular level of transition feasibility, building in not only site, vehicle and duty cycle considerations, but also factoring in known developments. Meanwhile our “Operate” platform integrates data from systems across the business’ operational sites, inherently automating reporting of road transportation carbon emissions and savings, together with capex and opex efficiencies.
Unlocking this potential early and having the data ‘action-ready’ means that businesses can realise opportunities sooner and prepare themselves for reporting requirements in a Business-As-Usual fashion.
Transition planning requirements provide a lens on corporate commitment and require a mechanism to systemise inputs from multiple stakeholders with an interest in the matter, and multiple data points across the business. By getting ahead of the regulation, businesses may see this process as much more than a compliance exercise. Transition plans are central to business strategy as the global economy transitions to net zero, and the countdown has already begun.
[1] Sustainability | Marks & Spencer (marksandspencer.com)
[2] Embedding carbon reporting for business growth & improvement: Breaking business barriers to Net Zero | The Carbon Trust
