The extinction timeline for businesses ignoring the green transition

The extinction timeline for businesses ignoring the green transition

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Explore how businesses like Kodak and dinosaurs share a failure to adapt, impacting survival. Learn from past errors.

Did dinosaurs ever think they would go extinct before a massive asteroid hit the earth? Maybe a couple of Einstein-usauruses recognised the signs, but the majority were oblivious despite their population declining before they went extinct. As Prof Barrett explains, the large asteroid collision triggered a series of events that led to the eventual extinction of our favourite T-Rex. That is all it took – one chain reaction which could not be stopped.

Did Kodak, Blackberry and Blockbuster think they would survive an era of digital innovation by relying on their trusted, reliable strategies? That certainly is the case, but history was not on their side. Some argue that they did not see the emerging technological advancements and suffered a fate similar to the dinosaurs.  

Why am I talking about dinosaurs and companies that only millennials recognise? Well, they have a lot in common in that they failed to adapt to historical events that would fundamentally alter their existence. The dinosaurs could be excused for not knowing, or Bruce Willis to help save them. However, businesses had a choice and failed to adapt to changing market dynamics. The evidence suggests a similar fate currently awaits businesses, ignoring the shift towards sustainability and decarbonisation. 

Too doomsday-ish in tone? Perhaps let us review the evidence, and you can judge yourself. 

The evidence presented below suggests there is high confidence that in the next 3-6 years, decarbonisation will offer a competitive advantage for businesses. However, after that, it will be business as usual and engrained within the DNA of companies that will remain market leaders by the time we reach net-zero.

What are businesses and scientists saying?

‘Decarbonisation as a competitive advantage’ is a common thread in recent publications from the Top 4 (Deloitte, EY, PWC, KPMG). Their findings could be considered a reliable corporate barometer for market trends. The reports are unanimous that investments in decarbonisation practices can bring a competitive advantage and present opportunities for identifying internal efficiencies. 

Evidence from the International Renewable Energy Agency (IRENA) suggests that>$35 trillion worth of investment is needed and that the world is up for grabs to reach net-zero. Let’s review some sector-specific evidence. We’ll look at some everyday products that we ubiquitously use in our day-to-day lives: transport/vehicles, clothes and paper. 

Veolia announced this year that their waste collection fleet will be electrified through a vehicle-2-grid (V2G) innovation that could power thousands of homes. Electric vehicles could de-facto become mini-power stations for local communities while owners save 28-67% of the charging cost versus flat tariffs (Dixon et al., 2022). This means that V2G can satisfy short-term storage (Xu et al., 2023) and eliminate the need for coal power stations

In the Austrian pulp and paper sector, carbon reductions of 75% are still available through installing electric boilers or heat pumps (Mobarakeh et al., 2021). 

Decarbonisation efforts have led GANNI to pioneer new materials by releasing bacterial jackets, bacterial nanocellulose bags and recycled materials. The D(R)YE project suggests disruptive innovation in dry processing may lead to carbon savings of >305 Mt CO2eq, and fashion companies are on their journey of exploring these novel processes. To put that into perspective, this is more than the annual emissions of France (292 Mt CO2eq). 

Wait, these were just examples of decarbonisation. Where is the proof that there is a competitive advantage? 

Empirical evidence of growth and decarbonisation

Scientists have found some evidence that the manufacturing, steel fashion and textiles sectors successfully leveraged decarbonisation for a competitive advantage.  However, making steel is somewhat different from making clothes, and there are varying levels of success in decoupling growth and decarbonisation

In simple terms, some companies have successfully emitted less carbon while growing their business operations over the last 20 years. A meta-analysis of studies reveals multiple synergies between decarbonisation and circular economy strategies for most consumer products

Empirical evidence of growth and decarbonisation
Figure  1: Companies in the textile and clothing sector and whether they successfully decoupled financial growth and carbon emissions growth. The analysis is based on country-level data from 2008-2018.
Credit to:
Collado et al, 2023

Decarbonisation is inevitable

Let’s look at one of the first countries that announced a globally binding net zero target - the UK. One of the key underlying reasons for corporate decarbonisation was a cleaner UK energy grid rather than necessarily individual corporate actions. This means that the driver for decarbonisation was UK policy, and the energy sector delivered much cleaner energy. Companies were not as rapid in their decarbonisation efforts. The business and industrial processes emissions reduced marginally (2%) between 2019 and 2021 despite a global pandemic limiting growth. With Net Zero legislation, companies will have to decarbonise sooner or later. So it’s a choice whether to strategically plan their business model or wait for policy and government officials to do it. Pressure also comes from a new generation growing up learning about sustainability from the earliest age

Millennials and Gen Z think large businesses are doing too little about climate. The evidence supports their feelings as EY analysis showed 95% of FTSE 100 companies needed a credible plan for reaching net-zero despite publicly committing to do so by 2050. This external scrutiny is also mirrored by pressure from within the organisations themselves. 

Amazon workers staged protests and publicly criticised their employers' climate-related progress. We are observing historic levels of employees taking climate action and demanding more from their employers. The number of climate activists has increased by >300% since 2019.  

Finally, in an open market, what matters is not people's self-reported attitudes but their behaviours. The question is, are they willing to back up their climate views with a willingness to pay

Consumers value sustainability, but communicating it is hard work.

McKinsey and BCG tried to assess whether consumers were willing to pay more for sustainable products, as per Figure 2. The McKinsey analysis showed a correlation between the prevalence of ESG-related claims and sales growth but not quite a causal relationship. The study opened up the wider debate on how consumers value brands and products that incorporate ESG claims. 

Consumers value sustainability, but communicating it is hard work.
Figure 2: Growth differential vs prevalence of ESG-related claims by product category. Credit to: McKinsey & Company, 2023. 
Figure 2: Growth differential vs prevalence of ESG-related claims by product category.
Credit to:
McKinsey & Company, 2023

Getting consumers to buy a specific product or not is not a decision merely based on sustainability metrics. Consumers often rely on a whole range of metrics, but mostly, it is the price that decides which product to purchase. And sometimes, marketing a product as more sustainable might even backfire!

One particular research study showed that fish with sustainability advertising ratings sold fewer products than unmarked ones, as shown in Figure 3. The researchers hypothesised that shoppers found the social norm messages pressing or manipulating, which led to psychological resistance. 

One particular research study showed that fish with sustainability advertising ratings sold fewer products than unmarked ones, as shown in Figure 3. The researchers hypothesised that shoppers found the social norm messages pressing or manipulating, which led to psychological resistance. 
Figure 3. Sustainability labelling (left) leads to decreased sales (right). Credit to: Richter et al., 2023
Figure 3. Sustainability labelling (left) leads to decreased sales (right).
Credit to:
Richter et al., 2023

When in doubt, always rely on scientists to provide evidence for the opposite of what one’s convictions are. The philosophical point is still extremely valid, though - robust and scientifically credible work doesn’t need to be published in an academic journal or take years to complete. The scientific principles of measuring success can help companies truly understand the impact of their actions. Communicating that journey to clients or consumers is a strategic decision that most companies are tackling. At the moment, businesses can still compete on marketing sustainability and leveraging it as an advantage. 

Policy is driving sustainability as a default in modern business strategies

There is the not-so-insignificant matter of 2,500 current and upcoming ESG and sustainability policies. Non-compliance with such policies has historically led to huge public scandals and reputational damage in accounting, which has much deeper implications than the associated fines. 

This might not be novel for the energy or scientific geeks.  However, understanding the relationship between carbon accounting, decarbonisation and business decision trade-offs is by no means a trivial task. Based on time tackling decarbonisation strategic issues in MHCLG, BEIS, Go-Science and Ofgem, I believe a lot of the ‘easy wins’ have been exhausted, and policy officials will now look to tighten environmental standards drastically. Based on the evidence above, one could make an educated bet. Those who continue investing in greenhouse gas-emitting portfolios will face a future of rapidly depreciating assets, face sanctions or taxes from national and international bodies and find it difficult to finance their operations. 

For businesses, net-zero is often referred to as a ‘wicked problem’: one where a silver bullet doesn’t exist and solving it requires a deep understanding of the multiple trade-offs involved. 

Mastering complexity

Let’s take the humble heat pump as a simple decarbonisation solution. It is a technology that has existed since the 1850s, and more than 175 million units have been installed worldwide. There is a plethora of scientific evidence on why heat pumps are a great solution for decarbonising heating (Gaur et al., 2021; Borge-Diez, 2022) whilst also acting as flexibility for balancing the electricity grid (Langevin et al., 2021). In theory, moving from a fossil fuel-based system (boilers and CHP) to a heat pump should be the easiest business decision to gain an advantage! Sounds simple, but is it?

We can technically use cheap, easy-to-install air-to-air heat pumps that provide cooling. In other countries, 88% of the population already have air-to-air heat pumps in their home or places of work, for example. One modelling study found they could be more efficient than air-to-water heat pumps using radiators (Xiao et al., 2020). But in the UK, most individuals and companies are still trying to use their favourite radiators best and replace gas boilers with air-to-water heat pumps with the same pipework in their buildings. But why? 

First of all, a lot of UK local councils have designated conservation areas where heat pumps cannot be installed on walls if they are visible from the road. People also think they are expensive and complicated to operate.  There are supply chain bottlenecks, a lack of qualified installers, and their flexibility potential could not be harnessed yet (Crawley et al., 2023; Wang et al., 2022). This simple decarb action has sparked a country-wide debate: “How heat pumps divided Britain”. This was fuelled by sustained media attacks against heat pumps uncovered by DeSmog. The debate peaked last year during the Prime Minister's net-zero speech. During his speech, Rishi Sunak mentioned boilers (n=6) and heat pumps (n=5) more times compared to any other decarbonisation measure, such as offshore wind (n=4), nuclear (n=2), energy efficiency (n=2), insulation (n=2) and solar (n=0). 

Let’s say a company has managed to balance these complex trade-offs: capital cost, operational cost, ease of installation, ease of operation, cultural heritage, aesthetic and carbon reduction potential. It has done its business planning, and the Board has approved a large-scale investment in commercial heat pumps across its portfolio and battery storage and/or solar panels to reduce emissions even further. All of a sudden, the local distribution network (DNO) says they need to wait 15-20 years for some of those technologies to be viable and connected to the grid. 

In its current state, the UK electricity grid cannot handle the expected rapid electrification. A common expression in the energy world is that there is no (net-zero) transition without transmission. The UK is by no means unique to this, with the US, Europe, Australia and Africa all facing similar issues. The IEA estimates that 80 million kilometres of new or refurbished electricity grid is required to deliver net-zero. This is roughly the distance between Earth and Mercury. 

Last but not least, there is only a limited number of resources on this planet. In a competitive market, first movers are likely to gain a competitive advantage, and they have just made their move at the World Economic Forum. The so-called ‘First Movers Coalition’ has reportedly grown to 96 members, collectively making 121 commitments that, until 2030, represent an annual demand of $16 Billion for emerging climate technologies and 31 million tonnes (Mt) CO2e in annual emissions reductions. 

Hint: Many industry, policy and political commitments are targeting the magic year of 2030, hence the bold predictions that decarbonisation should effectively be business-as-usual after that point. Otherwise, there is a limited credible pathway of reaching net-zero by 2050, as the Climate Change Committee starkly outlined last year

What does this all mean? 

Decarbonisation science and decision-making is an art form in itself!

It might sound straightforward on paper, but decarbonisation is a journey of scientific exploration: try, measure, learn, adapt, try, measure, learn, adapt. There are complex trade-offs that we might only know about once we make a change to how we operate our businesses. Companies can make decarbonisation decisions without any substantial evidence in support and trial innovative approaches; however, measuring their success requires an understanding of the carbon accounting methodologies, too. 

And it doesn’t seem like businesses have an expert grip on this yet. According to a survey of BCG and Microsoft, the majority of existing sustainability managers are internal hires and do not have a sustainability-related academic degree, as per Figure 5.

Figure 5. The current sustainability skills model has yet to be scaled. Sustainability managers are seeking support from expert partners to navigate the complex world of decarbonisation. Credit to: BCG/Microsoft, 2022
Figure 5. The current sustainability skills model has yet to be scaled. Sustainability managers are seeking support from expert partners to navigate the complex world of decarbonisation.
Credit to:
BCG/Microsoft, 2022

Is an academic degree a prerequisite for tackling these complex topics? Not necessarily, but mastering subject matter expertise is a necessity to tackle these issues

The biggest value of an academic degree is the empowerment of critical thinking and paving the foundation of subject matter expertise. On-the-job sustainability training and up-skilling can fill the growing number of knowledge gaps required in all companies to successfully guide their boards on the net-zero journey. 


The decarbonisation journey is not a sprint but a marathon. Based on experience, here are three considerations to make it effective:

  • A mentality shift from ‘quick wins’ to long-term strategic goals and milestones
  • A scientific curiosity ensures the credibility and reliability of the KPIs and methodology for measuring progress or success.
  • Bold leadership and willingness to learn from failure. 

Sustainability leads in companies are no longer just environmental stewards but architects of the future business landscape. Companies have a unique historic opportunity to use decarbonisation as a way to ensure their long-term competitiveness whilst also gaining co-benefits such as cleaner air and more sustainable living conditions

Scientific evidence and, more importantly – a scientific mindset – can drive companies forward in their voyage, or race, towards net-zero. You are not alone in this long quest. Plan A is a trusted partner that can empower you to make data-driven decisions and leverage our in-house scientific expertise to guide you in your journey transparently.  

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