Leading in a low-carbon future

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Leading in a low-carbon future

A “system of systems” approach to addressing climate change

How can executives drive industries and organisations to reverse course on climate change and lead a more sustainable economy?

Spurred by the climate crisis, the world has begun moving to a low-carbon future. As executives look to take charge of the shift in their industries and organisations, systems thinking can help make it a successful transition.

A growing number of businesses and governments are confronting climate change, announcing emissions goals and climate initiatives daily. And yet, progress as measured by declining emissions has been negligible, even considering the year of COVID-19 lockdowns.

There are many reasons why, but a key part of the problem lies in the tendency to approach the climate challenge through a lens focused narrowly on a single business or industry. Instead, what is needed is a system of systems approach: recognising that existing industries will be reconstituted as a series of complex, interconnected, emissions-free systems.

Accelerating progress towards net-zero emissions and tackling our toughest climate challenges will require extraordinary levels of collaboration and coordination across emerging systems. This includes government, finance and technology which can enable these systems as well as societal and economic forces which will drive the transition.

Five systems in the low-carbon economy

Deloitte sees five core, interconnected systems in the net-zero economy, roughly corresponding to the major sources of today’s greenhouse gas emissions plus the critical processes needed to take carbon out of the air:

  • energy
  • mobility
  • industrials and manufacturing
  • food and land use
  • negative emissions (both natural and technological). 

Participants in each of these systems will likely face deep transformation of processes, technologies, supply chains, and business models. The transition will almost certainly require collaboration and contributions from multiple systems.

How executives can lead

The sheer magnitude and complexity of the challenge can be overwhelming. Understanding where you should start, and what the journey may look like is key.

Published: July 2021

Leading in a low-carbon future

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