The integral role of every department in Australia's sustainable business revolution
By Mark Chadwick, Managing Director, Asia Pacific and Europe, ENGIE Impact
Thursday, 17 August, 2023
In the face of mounting global concerns over climate change and the need for sustainable development, Australian businesses are increasingly called upon to reshape their operational blueprint. This shift requires a whole-of-business approach where every department is actively involved.
To meet the growing demand for sustainability, it’s not just about adopting clean technologies; it’s about embedding a culture of sustainability into every facet of an organisation.
Unlike traditional business functions like finance and human resources, corporate decarbonisation is yet to achieve maturity. Australian businesses find that setting up strategies, implementation plans and managing carbon data often becomes disconnected from their broader objectives. In this relatively nascent stage of decarbonisation, treating it holistically and integrating it within the enterprise organisation is a hurdle many grapple with.
Operations teams: at the core of the transition
With corporate decarbonisation as an emerging discipline, the internal expertise needed for program development and oversight is not yet fully developed. In our Net Zero Readiness report released this year, which surveyed Australian businesses, it was revealed that 85% of Australian companies mentioned a lack of internal talent/decarbonisation specialists was a major barrier to decarbonisation initiatives.
Meanwhile, the current competitive employment market makes finding and hiring for these roles increasingly challenging. It’s becoming evident that the task extends beyond securing the right headcount; it necessitates enterprise-level shifts.
And while many companies are already implementing renewable energy solutions into their operations, the real challenge lies in efficiently integrating these technologies into existing frameworks.
Operations teams sit at the heart of this transition. Their role extends beyond merely implementing clean technologies; they are responsible for streamlining these technologies in a way that maximises efficiency and ensures the least possible impact on the environment.
In Australia, examples abound of companies successfully integrating clean technologies. Take South Australian wine producer Pernod Ricard, which became the first large wine company in the country to achieve 100% renewable electricity in 2019. This achievement did not merely involve the installation of solar panels; it necessitated an extensive review of the company’s operations and its people to optimise energy usage efficiently.
Procurement teams: guardians of sustainable supply chains
Sustainability doesn’t stop at operations; procurement teams are equally pivotal in this transition. They must take into consideration the environmental impact of their suppliers and products, known as scope 3 emissions. This requires more than just selecting ‘green’ options; it is about scrutinising supply chains, footprinting scope 3 emissions, mobilising action by ensuring suppliers comply with sustainable practices and opting for products that are produced responsibly.
It’s not an easy task: our Net Zero Readiness report also found that 66% of Australian organisations found working with supply chains to deliver Scope 3 carbon reductions a major barrier to decarbonisation. However, while it’s difficult it’s also necessary, and certainly achievable. Procurement leaders who take bold action can make a decisive difference in the success of their organisation’s decarbonisation efforts.
Financial professionals: navigating risk to fund projects
For financial professionals, decarbonisation is now a key area of focus, but many organisations struggle to fund large-scale decarbonisation efforts due to strict payback periods, limited internal capital and narrow investment criteria. To unlock the speed and scale of change that net zero targets require, CFOs will need to reimagine capital allocation models to better account for the true value of decarbonisation.
A shift towards more sustainable investments can drive growth and yield substantial returns in the long run. Consider the Clean Energy Finance Corporation (CEFC), which has committed over AU$10bn in clean energy projects across Australia, demonstrating the potential for green finance to drive sustainable growth.
Human resources, marketing and comms: attracting and retaining the right talent
Talent acquisition and retention strategies need to be reframed to attract those passionate about sustainability. As more professionals choose to work for organisations that align with their values, HR teams must work to ensure the business appeals to this growing talent pool.
Recent research has found that nearly 70% of employees would look at a company’s record on the environment before deciding whether or not to take a job with it — and would turn to social media to research that record. Additional research found that a quarter of people would take a pay cut to work for an environmentally sustainable company.
Concurrently, marketing and communications departments also need to protect against perceptions of greenwashing from external stakeholders and media; no longer can companies claim to be sustainable without evidence, and an allegation of greenwashing can hinder recruitment efforts.
These challenges ensure that all three departments will have a pivotal role in shaping a company’s decarbonisation roadmap.
An organisation-wide approach is imperative to effective decarbonisation
Sustainability expertise needs to be embedded throughout the entire organisation. As the Melbourne Business School’s Centre for Sustainability and Business points out, the biggest financial payoff comes when sustainability grows beyond discrete efforts in functional areas and becomes embedded in the firm’s strategy.
This holistic approach equips companies to navigate the transition towards a low-carbon economy, creating a lasting impact. Ensuring a just transition for workers and communities affected by this shift is also paramount.
In a world where sustainability is increasingly non-negotiable, Australian businesses are well positioned to lead, demonstrating that a commitment to a greener future can also foster prosperity.
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