How greentech can help companies to decarbonise
By Kevin Chin, CEO and Founder of VivoPower
The climate crisis is arguably the most pressing issue of our time, the urgency of which has only been strengthened by a global pandemic that has laid bare how vulnerable we are in the face of global threats. A study by Climate Dynamics suggests that the threshold for dangerous global warming will likely be crossed between 2027 and 2042, so it is clear we must be doing everything we can to ensure decarbonisation is occurring – not only in our homes but on a corporate scale, too.VivoPower is pioneering Cleantech for corporate decarbonisation Click To Tweet
To this effect, governments around the world have been announcing policies with ambitious decarbonisation goals. Take, for example, Boris Johnson’s announcement of a ’10 point’ net zero plan to prompt net-zero emissions by 2050 in the United Kingdom, driven by a £12bn initial investment. This is all well and good, but more must be done to avoid global climate change reaching a point of no return and I believe that the onus is on businesses to fully commit to decarbonisation.
Corporate cleantech is the answer, but how can leaders and CEOs implement this profitably and minimise disruption to their businesses? What does a corporate decarbonisation strategy look like across different industries?
The role of CEOs in driving corporate decarbonisation
Clearly, it is vital that CEOs and board members all buy into decarbonisation to ensure that companies are run with sustainability in mind, but also to drive efforts to reach net zero emissions globally.
Indeed, ESG (Environmental, Social, and Governance) is at the top of the agenda for CEOs. A recent outlook study by KPMG among CEOs found that besides talent risk, ESG tops the list of CEO concerns amid the COVID-19 crisis. While many may have thought that the pandemic would have toppled ESG and decarbonisation from the priority list, as businesses clamour to survive the economic threat posed, this has not been the case.
While climate change remains top of mind, it is vital that CEOs and leaders in business continue to not only drive and strengthen their ESG credentials but also to encourage a business environment that focuses on reducing carbon footprint and greenhouse gases. The same study by KPMG also found that 71 percent of CEOs say they want to lock in climate change gains that have been realised during the pandemic – a trend we hope continues as we begin to emerge from the global crisis.Environmental, Social, and Governance is top of the agenda for CEOs Click To Tweet
Today, Cleantech has developed to such an extent that fossil fuels can be replaced for a huge number of corporate uses cases in a way that actually saves money as well. Solar power currently makes up around 2% of total energy production in the US – but we expect that to rise as the cost per watt continues to fall. In the early 2000s, the average US solar system cost was $10/watt – today, the price hovers around the $2-3$ mark. Similar price falls in wind and hydroelectricity present an ever-weakening argument for the renewed usage of carbon-based power. Indeed, companies are now able to access purpose-built solar power and battery storage systems, as well as microgrids, to reduce costs and emissions – all managed to maximum efficiency through the collection and analysis of various usage and demand data.Solar power makes up around 2% of energy production in the US Click To Tweet
One example of this is Premier League football club Tottenham Hotspur, recently named the Premier League’s greenest Club. It partnered with VivoPower earlier this year to provide the club with a range of Cleantech solutions. VivoPower will supply a large, solid state battery with capacity of more than 3 MW at the stadium to balance and guarantee the venue’s power supply. A full-suite solution – including rooftop solar panels, battery storage, custom microgrid controls and electrical infrastructure – will also be designed for the club’s training centre.
Yet decarbonisation strategies can be applied across a whole host of industries – even traditionally ‘hard-to-decarbonise’ ones such as mining. Tembo, a specialist battery-electric and off-road vehicle company that focuses on designing and building ruggedized light electric vehicle solutions has made it possible for mining firms to reduce their footprint without hurting their operational capabilities. In December 2020, VivoPower announced a US$250 million distribution deal to distribute Tembo’s all-electric utility conversion kits in Australia, the biggest known conversion kit deal to date. The firm also recently announced a proposed $120m distribution deal with Tembo and Acces Industriel Mining Inc. in Canada, as well as a deal to become Toyota Australia’s exclusive partner for Landcruiser electrification.Tottenham Hotspur was named the Premier League's greenest Club Click To Tweet
The electrified vehicles provide firms with an economically viable proposition to the petrol or diesel alternative. Mining is an industry that has come under intense scrutiny from an ESG point of view, and whilst merely electric vehicles will not prompt complete carbon neutrality, they highlight a position from which companies can make environmental progress in an industry that contributes between 4-7% to greenhouse gas emissions globally.
Such examples across the mining and football industries show how decarbonisation goals are logistically and economically feasible for businesses across a range of sizes.
Cleantech as catalyst for corporate decarbonisation
While VivoPower is pioneering Cleantech for corporate decarbonisation, the sector will have to sustain rapid growth in order to keep up with demand as more CEOs look to make decarbonisation a priority. Indeed, this will be pushed further by investor interest in ESG compliant companies. Four in five companies plan to introduce ESG measures, according to a global Willis Towers Watson report, and one could infer that this is partly driven by the desire not to be left behind by a global investor shift towards ESG funds, which more than doubled over 2020 – capturing $51.1 billion of net new money from investors.The climate crisis is arguably the most pressing issue of our time Click To Tweet
With the pandemic helping accelerate the trend towards corporate decarbonisation, I expect that CEOs and leaders in business will continue to push the ESG agenda forward. However, it is critical that business leaders – from top to bottom – prioritise ESG and sustainability to help meet net-zero carbon emission targets.