Sustainable Business Series: Fill your leadership gap to unlock Net Zero
This blog post has been produced for the Greater Birmingham Chambers of Commerce as part of the 2023 Sustainable Business Series. The Sustainable Business Series seeks to help local firms understand the role that they play in progressing to net zero, as well as the opportunities and challenges that may arise from the net-zero transition. Through an expansive range of blogs, webinars, events and Q&A’s, the Sustainable Business Series offers useful information to businesses interested in adopting a sustainable business approach. Click here to register for Sustainable Business Series events and webinars.
There is much talk of net zero and the measures required to reduce the impact of climate change that will affect every aspect of our lives. We urgently need to move this ambition into action. PwC’s Net Zero Economy Index 2023 analysis suggests that the world needs to decarbonise seven times faster than at present to keep global warming within 1.5°C above pre-industrial levels. Yet the lack of progress is not down to a gap in knowledge of what action is required, but rather a gap in leadership practices. This is what is preventing businesses and institutions from achieving their net zero ambitions at pace.
When organisations tackle decarbonisation, the main focus tends to be around solving technical problems. These are typically surface issues that can be resolved using existing practices and expertise, such as developing a net zero strategy. Teams often don’t consider the adaptive challenges – those that are complex and ambiguous with no obvious solutions, such as creating a carbon neutral business model. This generally leaves the root challenges under-addressed. For example, a company might have an action plan to decarbonise its production processes on paper, but little tangible progress has been made. The adaptive challenge at the root of this inaction could be that the company values keeping costs down as inflation rises over delivering its climate ambition. Until a value shift happens, action will remain limited.
Organisations that engage with the deep-rooted adaptive challenges of net zero while addressing the technical problems are closing the leadership gap, ensuring they can deliver change and become fit for the future. Leadership is critical. Getting the balance right requires the ability to take a systemic lens and cultivate an adaptive organisational culture.
Earlier this year, PwC worked with the Birmingham Leadership Institute (University of Birmingham) to explore the net zero leadership gap further and interviewed three organisations – public and private – at different stages of their net zero journey. We observed that leaders who were collaborating across systems were making the greatest progress. These leaders empathised with the fear of change while celebrating the gains of the new normal. They also modelled collective leadership so everyone in the organisation embraced their responsibility for achieving net zero.
How to bridge the net zero leadership gap
The organisations we profiled highlighted three practical steps to bridge the leadership gap and accelerate net zero transformation:
- Identify the technical problems you face and uncover the adaptive challenges that lie beneath them. Then define what needs to change at that adaptive level to unlock progress on the technical problems.
- Find out who you need to work with – both within and outside of your organisation – and foster collaboration to drive change. It is unlikely the adaptive challenges you’ve uncovered by be solved by your organisation alone.
- Embed adaptive leadership in your organisation – be clear on what needs to change and honest about the compromises required. Ensure you take your people on the journey with you.
To find out more about how to bridge the leadership gap and accelerate your net zero transformation, read the full report.
Christopher Pietroni (University of Birmingham) and Isaac Vivian (PwC)