"If you want to achieve high targets, you have to break with the status quo."
Experte: Dr. Jan-Christoph Haag, Vice President, ROI-EFESO | 10/26/2023 | Teilen auf in
How do energy-intensive companies achieve reduction targets for greenhouse gas emissions? Solution approaches were shared by the participants of the networking event "Greenhouse Gas Reduction" on October 6, 2023. Dr. Jan-Christoph Haag, Partner / Vice President at ROI-EFESO, summarizes results of the event.
Participants at your event learned live on site from the management of the Port of Antwerp-Bruges, how sustainable transformation can succeed. What made the event additionally unique?
Jan-Christoph Haag: Certainly, the combination of the different perspectives and industries on how industrial sustainability is realized – in this case especially with the goal of achieving climate neutrality. To this end, there was a lively and inspiring exchange of experiences: in addition to the host's success story, there were also examples and approaches from the chemical industry, materials development, construction, e-mobility and other sectors.
What commonalities in dealing with the topic were you able to identify?
Jan-Christoph Haag: There is a high level of motivation across all industries to achieve results in reducing CO2 emissions. At the same time, this motivation comes up against the question of how to achieve the goals, as the challenges are great and highly complex. It became apparent that the companies are very actively scrutinizing their entire environment, the market and the business model. All of them are taking an in-depth look both internally and externally, and at the same time looking for best practice methods. Like the ones we discussed at the event.
What do you see as the main challenges?
Jan-Christoph Haag: The challenges are complex, and several factors are decisive in dealing with them. I would like to mention five of them as examples:
First, the "technology" factor: some industries, such as the steel and chemical industries, are energy-intensive and have process-related high emissions. As a result, it is difficult to convert these technological processes, which have been optimized over decades, quickly and economically.
Second, capital-intensive infrastructures. Large capital-intensive plants form the basis of companies' value creation. Accordingly, a switch to lower-emission technologies requires substantial additional investment.
Third, competition: most companies operate in a tight global market environment, which means that higher product costs resulting from emission-reducing investments must be realizable in the market.
Fourth, the complexity of Scope 3. In particular, indirect emissions along the entire value chain are not easy to quantify and manage. This requires in-depth analysis and effective approaches to influence.
Fifth is regulatory uncertainty. The changing regulatory environment and uncertainty about what regulations will come inhibit investment.
These points show that transformation and active, targeted action are needed now, despite all the uncertainty. It is important to build up decision-making models for investments and to initiate them at an early stage, for example, to change the corporate culture.
What is your recommendation for solving these challenges?
Jan-Christoph Haagg: There are three thrusts that every company should pursue. First, to define and prioritize a CO2 reduction program. Second, if necessary with methodological and technological support, to build up a company-specific evaluation and decision-making model that can be used to back up a large number of decisions – especially investments. This makes it possible to plan scenarios and create clarity for decisions.
Thirdly, it is essential to examine whether step-by-step further developments in the direction of sustainability are sufficient. Our experience shows that new and far-reaching approaches need to be found. This includes, for example, a breakthrough innovation approach for the future Product portfolio. But equally for thinking in partnerships, beyond one's own industry. For example, partnerships and cross-industry thinking enable the transformation of waste into raw materials.
In your experience, how do organizations achieve "breakthrough innovations" today?
Jan-Christoph Haag: With the breakthrough innovation approach, the aim is not just to optimize future products, but to create entirely novel solutions to existing challenges. The company's own products and, if necessary, its business model must therefore be scrutinized: What can be manufactured today, but perhaps not tomorrow? How can we use the existing capabilities in the company for sustainable business in the future? Which investments are strategically necessary, which investments no longer make sense?
Many employees and managers in the company already understand the current sustainability drivers. They already make an active contribution within the framework of internal projects and corresponding roles. However, it is difficult to radically rethink in their own environment, to identify the future relevant capabilities of the company and to rethink the Product portfolio up to the business model.
Is there an effective way to change this?
Jan-Christoph Haag: Methodologically, short workshop series with selected participants are already sufficient for "new thinking". This involves systematically working out the influencing factors inside and outside the company and defining the relevant levers. In addition, this significantly increases enthusiasm for the topic among the workforce, because employees participate in concrete solutions and successes become visible. Often, the perspective is also broadened – not only in the sense of cross-departmental or cross-plant cooperation. But also, if desired, by obtaining external perspectives from partners or customers.
Which also opens the boundaries of the company to new players ...
Jan-Christoph Haag: Correct – but this is often not a secondary option, but an absolute necessity to achieve the sustainability goals. This is another approach to solving the problem: seeking and shaping partnerships outside one's own industry. Which can mean opening one's highly specialized environment selectively and entering active exchange within and outside one's own industry.
This is a step that many companies find particularly difficult. To what extent can this change?
Jan-Christoph Haag: Opening is difficult because for a long time it was not one of the principles of one's own actions. A more open approach in certain areas and, for example, joint R&D activities for specific products not only enable an increase in innovative strength, but also bring together a lot of experience from different areas in a profitable way.
In addition, when the entire value chain is scrutinized it becomes clear who the potential partners are. Actively questioning the status quo of the current "optimum of value creation" and really breaking with it is therefore a very central prerequisite for achieving high targets – especially, but not only, in sustainability.
Can all companies follow a similar path to the pioneers? Or are there limitations?
Jan-Christoph Haag: Basically, all companies must find their own way and catalog of measures for implementing their goals. At the event, some companies showed very clearly how they proceed proactively and holistically.
As ROI-EFESO, we are happy to support companies in a project on "Scenario Planning" and "Breakthrough Innovation". The very compact methodical approach considers the specifics of the company and its entire environment. Thus, the companies receive clarity, orientation, and a rapid definition of the right measures on the way to achieving their sustainability goals. They also receive a model of the most important influencing factors as a basis for decision-making for their corporate actions.
