Climate change has been called the defining issue of this generation, or as others put it, “code red for humanity”. It’s an issue that will profoundly affect every society on the planet if we don’t act meaningfully – and swiftly – to reduce our carbon emissions. With our 2050 net zero carbon commitment and pledge to halve greenhouse gas emissions by 2030, New Zealand is one of the world’s leaders in legislating for climate change.
However, as Microsoft’s new report shows, we’re on track to fail without further action. Many businesses are confused about how to measure their current emissions or track their progress, and others are concerned about getting the right skills or finance in place to see their sustainability strategies through. If we’re serious about reaching net zero, we first need to understand where we’re coming from. Better measurement and more innovation to improve businesses’ access to technology, skills and funding are our clearest path to success.
If you can’t measure it, you can’t manage it
There’s a very definitive gap between our intentions and our actions that must be resolved. In our new Accelerating the Journey to Net Zero research, led by Dr Chris Brauer of Goldsmiths University, 76 per cent of Kiwi businesses reported plans to be carbon neutral by 2050. However, around a third (32 per cent) of organisations with 20 or more employees said they would miss the target. And that doesn’t take into account small businesses, which make up around 97% of New Zealand’s business environment. If larger organisations, who are better resourced, are struggling, what will that mean for the majority of SMBs?
In fact, New Zealand’s net emissions have risen 60 per cent since 1990, faster than any other developed nation except Turkey. Per head of population, New Zealanders are currently emitting three times their “fair share” of global emissions. We’re simply better at developing strategies than operationalising them.
The report is very clear on why. We’ve been slow as a nation to implement monitoring and technologies that enable organisations to accurately determine how much they’re emitting, and where their emissions come from. And if you can’t measure it, you can’t manage it. Just 12 per cent of organisations are currently mapping their emissions. By contrast, in the UK, where net emissions have fallen 40 per cent since 1990, nearly half of organisations are charting their progress.
Clearly, there’s more work to do to educate local businesses on what tools are available to simplify the sustainability reporting process. For example, Total Utilities runs reporting as a service, which can drastically reduce the burden on businesses and employees. The Sustainable Business Network’s Climate Action Toolbox is a basic carbon calculator that provides another easy way for small businesses to get going quickly.
What actions can we take?
But measurement is just the start. The business leaders and employees interviewed for the study also reported the following barriers to implementing sustainability policies: lack of the right in-house expertise, lack of a clear organisation-wide strategy, poor understanding of the costs of their sustainability plan and insufficient access to sustainable technologies and insufficient funding. So what can we do to address these issues?
The report concludes we need to “start fast and think big”, combining short-term actions for quick success with longer-term strategies. In the short term, the focus should be:
- Setting explicit quantitative commitments for carbon reduction and removal
- Building in-house expertise and gaining multi-stakeholder buy-in to close funding gaps
- Monitoring supply chains and using carbon measurement technology
- Factoring natural capital – things like biodiversity, water quality, and natural disasters – into corporate strategies
As a tech company, Microsoft is especially interested in how digital innovation can support decarbonisation. Many sustainability leaders are deploying automation, machine learning, digital twins (and of course, capturing data) to drive greener outcomes. But sustainable cloud offers the greatest opportunity for change. Every business uses data, and that data must be stored somewhere – and traditionally that’s been in power-hungry on-premises datacentres.
In 2018, another study into Microsoft cloud showed that it’s between 22 and 93 percent more energy efficient than traditional enterprise datacentres, partly because it removes so much on-premises infrastructure and replaces it with far more efficient technology at scale. With hyperscale cloud arriving here in the next few years, this is our opportunity to transition New Zealand’s extremely carbon-heavy data infrastructure into a much more sustainable cloud model.
The onus is on large organisations to spearhead the use of technologies like sustainable cloud to achieve net zero targets, as this creates scale and benefits the wider business ecosystem. It’s critical they ensure net zero is embedded in corporate R&D and innovations, as well as provide finance to develop innovative net zero solutions, products and services. For example, architecture and design firm Jasmax has established measurement frameworks to help others in the construction industry understand the impacts of different building materials and methods on emissions, aiming at transforming the whole end-to-end construction process. This is exactly the kind of collaborative approach we need, with larger, well-resourced businesses investing in R&D to the benefit of others.
Collaboration is the only way forward
Above all, we need greater collaboration between government, businesses, academics and NGOS to solve collective challenges, including upskilling our workforce and financial innovation that accelerates the green transition. It would be great to see more public-private partnerships, along with dedicated funding to support businesses wanting to leverage technology to reduce their carbon emissions. The report also suggests a government incentive to require the use of best-available technology for containing carbon emissions.
Ultimately, while technology is hugely important, achieving net zero carbon requires a change of culture and mindset. The talk during Covid has been how do we return to normal, but normal was killing us. Taking the steps identified by the report will naturally require determination, investment and commitment right across organisations and the public sector. But the cost of not doing this is far greater than the cost of taking action. And the longer we delay, the greater that cost will be.