Pillars of the Green Transition

Critical junctures marking the end of a global era do not happen often. Today, there is substantial evidence to affirm we are approaching one. Governments and companies are facing the consequences of the U.s.-china trade wars initiated in 2018, coupled with the blows of Covid-19. In addition, an inflation- ridden outlook, supply chain disruptions, and the race to combat climate change has led them to juggle survival needs with costs and sustainable choices. As war knocks on Europe’s door with Russia’s invasion of Ukraine, consequences of a bleak, energy-scarce winter echo in the media and loom ominously over the West. An over-reliance on China’s market monopoly in the production of raw materials has left Western economies vulnerable, and one can sense that an inauspicious air is taking over.

However, necessity is the mother of invention, and no crisis comes without an opportunity. Our realization of a problematic dependence on Russia’s oil and gas or Asia’s materials comes with a silver lining; the possibility of transitioning into a cleaner and more secure economy. In this report, leaders from North America, Europe and Singapore discuss how they are spearheading the green transition through technology, innovation and the will to be a part of the circular economy.

Transitioning effectively will require the improvement of processes not yet refined, and a reliance on industries that might still carry negative perceptions. Mining, for example, holds the key to supplying all the necessary materials for copper cabling, solar panels, wind turbines and electric batteries. While sustainable practices within the sector are necessary, it also requires support and investment to continue developing technologies and innovation to scale up and meet exponential demand.

The International Energy Agency noted that oil and gas energy sources will still play a role in 2050, particularly for hard-to-decarbonize industries. This kind of Catch-22, is one that will require swift and ongoing improvements. “The conversation has to stop being about ‘keeping fossil fuels in the ground’ and instead become about all the ways that this industry is cleaning up its production[...] Fossil fuels assure the cash flow needed to invest in greener energies. Until 2050, 45% of global energy demand will be met by fossil fuels, so we need to challenge the industry to become cleaner,” said Iman Hill, Executive Director of IOGP (International Oil and Gas Producers). Dr. Patrick R. Grubber, CEO of Gevo, added that “agriculture has a bad reputation globally, and many think it is almost as bad as fossil fuels, but this depends on the methods the growers use. If we are producing biofuels, and we care about producing and improving protein, we need to measure the carbon intensity of every unit we sell.”

Technology and innovation are ramping up at an exponential pace. Companies that had not fully transitioned into Industry 4.0, that of the digital era, are now having to leapfrog into Industry 5.0, digitization with purpose and an ESG (Environmental, Social and Governance) focus. Accenture decided to coin their own term, Industry X, “as the industrial revolution is accelerating and its stages – 4.0, 5.0 – are overlapping, there is no point in limiting it to a specific number,” said the company’s Jan-willem Jannink, Industry X Energy Lead. Communications giant, Telus, has been collaborating with the Canadian government to develop the Federal Sustainable Development Strategy (FSDS). Their goal is “to help them understand how digitization can have a positive impact on climate itself,” said Geoff Pegg, Head of Sustainability and Environment.

The green transition will rely on multiple pillars - such as policy, renewable energy, technology, innovation, investments, and mining. Virginie Helias, CSO at Procter & Gamble, has said that “there still is a considerable intention to action gap of about 50%, which means that only half of people who claim they want to live sustainably are actually taking action to do so.” Consumers can play a key role by shifting behaviors and choosing the companies they place their confidence in wisely. A successful transition will require all actors working in tandem for a shared outcome.