Accelerating Net-Zero Ambitions with a ‘Green Growth’ Strategy

In today’s business landscape, sustainability is on the boardroom agenda of every modern enterprise. Whether these goals are driven by an organizational mission to protect the environment, or evolving consumer demand to engage with eco-friendly brands, leaders who do not put sustainability in focus risk more than just our planet’s resources.

Many organizations are beginning to chase the concept of “green growth,” which the Organization for Economic Cooperation & Development (OECD) defines as a strategy that harnesses knowledge and best practices gleaned from member countries to create policies and tools that promote economic growth while avoiding environmental damage. At a high level, green growth provides a roadmap for how to use funding generated by the Inflation Reduction Act of 2022 (IRA) toward valuable investments that reduce climate impact and enhance the protection of crucial natural resources.

Leaders should begin to cultivate an understanding of what green growth might mean for their business -- from how governments will incentivize companies who plan to invest in renewable energy infrastructure, to how they can set up a successful roadmap and what challenges may await them. 

Green Growth in the Public Sector

There are many incentives for businesses outlined in the IRA, which when combined with the incentives at state and local levels, will lead to extraordinary deployment of new, clean energy solutions and push enterprises towards achieving their greenhouse gas emissions targets. There are several types of incentives outlined in this policy, including:

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These provisions will increase energy production, accelerate the deployment of clean energy technologies, reduce carbon emissions, lower energy prices, and help build a more reliable and affordable energy sector.

Beyond the provisions listed above, the IRA is also investing in disadvantaged communities by prioritizing projects that reuse retired fossil fuel infrastructure and employ displaced workers. What’s further, this policy outlines incentives for climate-friendly agricultural practices, which are expected to make meaningful progress towards a more fair, equitable, and economic clean energy transition. 

Related:Biodiversity Means Business

The Necessity of a Sustainability Roadmap

Those wondering why this sector-wide movement toward net-zero is so crucial should consider that sustainability is no longer an option -- it is an essential part of our everyday lives. Beyond reducing carbon emissions, energy usage, materials consumption, and waste are true business benefits to be reaped by developing a sustainability agenda.

This is true for all industries but has specific implications for the engineering sector. For example, reducing energy and material consumption in industrial processes will enhance operational efficiency and reduce costs, while eliminating waste by building in recyclability will have significant top- and bottom-line impacts.

From a broader business perspective, enterprises investing in sustainability will increase their competitive advantage, strengthen their brand narrative, and build trust with existing and prospective customers. As previously mentioned, environmentalism has become a necessity, and is often a key pillar for meeting stakeholder expectations -- whether that be employees, customers, investors, or regulators. To compete and thrive in markets that have strict environmental, health, and safety regulations, these initiatives must be a priority.

Related:How to Become a Sustainable, Green IT Organization

Benefits and Required Areas for Success

The success of a green growth strategy requires a comprehensive approach that takes into account a variety of environmental, social, and economic factors. It involves setting targets and monitoring progress toward achieving a sustainable and equitable future for all.

Green growth is centered around the following five factors:

In order to map out a green growth strategy for your organization, all of these factors must be considered. The benefits earned from a successful transformation make this process worthwhile. Beyond ensuring sustainable use of precious natural resources, enterprises that implement green growth can increase employment opportunities by generating new roles, reducing costs, and helping to undo the environmental damage caused by rapid industrialization.

Understanding the Barriers and Where to Start

Though the opportunities are ripe for the taking, leaders should also be aware of several challenges to overcome on this journey. Similar to many new business initiatives, it can be difficult to obtain the necessary finance and funding for this type of transformation. Paired with the cost of new technology -- since these solutions have yet to scale -- the entry barrier to initiate a green growth transformation is quite high.

In response to these fiscal challenges, sustainability should be made a top-down initiative, with c-suite leadership clearly articulating the business case to key stakeholders, embedding sustainability as a core design principle, and implementing protocols to avoid greenwashing sustainability credentials.

Talent is another potential challenge. As with any new technology, existing talent may not have the qualifications to quickly adapt to the new agenda. This knowledge gap and skills shortage can stop a green growth initiative in its tracks. It is of critical importance that organizational leadership staffs for sustainability, which requires new skill sets and a new leadership model.

Leaders wondering if green growth is right for their business should closely evaluate all the associated benefits and challenges. It will be key to measure the environmental impact of their business and generate sustainability awareness throughout their core leadership and workforce.

There is no one-size-fits-all solution, and while some enterprises may feel equipped to tackle this transformation head-on, others should implement a modular approach -- looking at making parts of their businesses sustainable -- instead of a big bang approach.

Above all, leaders should foster an environment where new ideas and innovation are encouraged, and where sustainability and climate action are considered top of mind.