Can we truly envision what a net zero future demands from companies and how do transition plans help to navigate the steps in between?
In this Solutions House session from Climate Week NYC, hosted by Louise Rehbinder, Director of the Exponential Roadmap Initiative, leading panelists explore the critical role of detailed transition plans in helping businesses navigate the path to net zero emissions, focusing on sustainable strategies, risk management and aligning corporate operations with climate goals.
Why transition plans matter
Claire Wigg, Head of Climate Performance at the Exponential Roadmap Initiative explains that while corporate focus on greenhouse gas (GHG) accounting and target setting has evolved over the past two decades, the urgency now centres around actionable transition plans.
Recognising the rapid increase in corporate transition planning, the Exponential Roadmap Initiative developed a detailed playbook based on four key pillars: operational emissions (scopes 1 and 2), value chain emissions (scope 3), product impact and societal influence (scope 4). However, companies required further guidance to translate these pillars into practical plans, says Wigg. By mapping various guidelines, including the UN’s Integrity Matters report, the Exponential Roadmap Initiative created a structured template for companies to frame their transition plans, offering tailored feedback and supporting deeper strategic alignment. Claire Wigg:
People are finding it, within corporates, difficult to imagine that long term future and transformation. That’s a problem, because that means some transition plans won’t be addressing that transformation that we need. They’ll be doing it incremental. How can we reduce our emissions by another 5%, another 3%, but not perhaps transforming the whole business because the time horizon is too short if you’re looking only to 2030. We decided to have a think about how we could help companies envision this long term. We came up with the concept, the Net Zero Operating Space for Business. We have to get down to zero greenhouse gas emissions and at the same time, we need to meet the needs of all the people who will be living on this planet in 20 or 30 years time. So, we came up with four conditions which we think can help companies envision this future, because they can define this net zero operating space for business. They are: circular (everything in a business needs to be circular), optimised (efficient use of all assets and all resources), renewable (in terms of materials and energy) and the fourth one is regenerative (all the processes in the business need to give back, more than they take). Circular, optimised, regenerative and renewable.
This framework helps leaders envision the fundamental transformations needed to align with net zero goals, providing a practical blueprint that transcends mere incremental emissions reductions. Member companies can set specific performance indicators within these four areas, ensuring climate action is embedded into business strategy and supported at executive levels, facilitating a shift that is both impactful and sustainable.
Setting ambitious targets
Anna Celsing, Chief Sustainability Officer at Alfa Laval, highlighted the company’s commitment to sustainable solutions and the importance of “walking the talk” by setting ambitious targets around renewable energy, efficiency and circularity. Anna Celsing:
We have set targets on those pillars, renewables, efficiency and also circularity. We’re not there yet on regenerative, but that’s the next step. And we’ve done that by having, what we called before we had the term transition plans, roadmaps across our entire organisation. To track and also be transparent every quarter to the outside world how we’re progressing on our targets. So, since we started our journey, we have more than halved our operational emissions, at the same time as we have also increased our turnover by over 50%. So, that means that we actually decoupled our growth from our carbon emissions increasing. That’s quite something that we need to see in the rest of the world as well.
Sriram Rajagopal, Head of Climate and Air Pollution at IKEA, outlines IKEA’s comprehensive approach to reducing emissions across its global value chain. Sriram Rajagopal:
We are part of the problem and we need to be a part of the solution. In November 2022, we went to the board with our proposal of a transition plan. We did not have detailed action plans to back it, so it was rejected by the board. So, we went back to each part of the value chain and the business owned the actions; how they will transform the business for each part they sit in and move towards 2030 and get halving of the emissions. Based on that, we went back to the board last year in November and we got an approval for our net zero goals.
So for us, the roadmap was a precondition for having our net zero goals approved.
Balancing ambition and unpredictability
Aron Cramer, CEO of BSR, a global nonprofit focused on sustainable and just business practices, discussed the progress and challenges that companies face in meeting climate and sustainability goals, in particular the need for balanced transition plans that align ambition with realistic assessments of unpredictable factors. He highlighted that some plans assume overly optimistic conditions, advocating instead for a pragmatic approach that anticipates setbacks. Aron Cramer:
In terms of the transition plans, I think it’s important to hit the sweet spot between the ambition that we know that we need, and also a degree of humility and pragmatism in terms of the the things, where we don’t know what the answers are. We know that there may be surprises that come along the way and I think some transition plans, they sometimes embrace a little bit of happy talk and assume that the conditions will be ripe for progress. That is maybe more linear than I think experience tells us progress will be.
Andrew Merrie, Science, Futures and Partnerships Lead at Planethon, advocates for guiding business leaders toward a regenerative, renewable and optimised future, even if such a vision currently feels like science fiction. He stresses the importance of combining imagination with actionable steps, as well as science with storytelling, to help companies explore and feel their way into this transformative future. Andrew Merrie:
If you just tell stories about the future, decoupled from science on the one hand, or decoupled from the realities of business space, that doesn’t work either. An equally important part is, yes, you envision the future and then you work back and say, if we can see what this renewable, circular, optimised company would be, then how do we get back to where we are today and how do we link the transition plans with them? It’s a constant conversation between the future and the present.
Anyone can engage in the future, but it is a process of upskilling and training. So, a really important part of this is future literacy. How do you build the capacity of leaders to be able to anticipate and feel comfortable with all this uncertainty?
Watch the session (49 minutes):
