Rising global energy prices and ambitious carbon neutrality targets are accelerating the need for businesses to implement Green Transformation (GX) management solutions as the need to manage costs and be regarded as a responsible company increase in importance, according to ABeam Consulting (Thailand), a global consulting firm with specialized digital transformation capabilities.
This comes at a time when the Thai government has pledged to achieve carbon neutrality by 2065, and uncertainty over global energy prices increases. Additionally, according to the Global Climate Risk Index, Thailand was among the top 10 countries that suffered most due to climate change between 2000 and 2019, both economically and socially
"While it is a responsibility of us all to reduce greenhouse gases and environmental impact, businesses can lead the way in green growth by implementing Green Transformation management solutions to reduce their impact on the world. The right green practices benefit both the economy and the environment, and we encourage companies in Thailand to look at the changes they can make to their strategic roadmap to meet their goal of achieving carbon neutrality," said Mr. Ichiro Hara, Managing Director of ABeam Consulting (Thailand) Ltd.
The critical challenge for many companies in achieving balance between corporate management objectives and GX. ABeam Consulting, in collaboration with The Japan Research Institute, has identified four essential tasks that businesses should carry out to realise their GX objectives.
Formulate a carbon neutrality roadmap
Formulating a roadmap that must be implemented to realize GX requires the visualization of multiple greenhouse gas reduction measures ordered from those with the highest return on investment. The return on investment of a given greenhouse gas reduction measure will fluctuate with changes in the price of energy procured, and this makes it necessary to continuously evaluate the return on investment of such measures in response to changes in the market environment. It also requires a flexible roadmap built on the assumption that implementation plans will be revised as needed.
Collaborative supply chain CO2 reduction measures
While coordination and cost burdens will raise issues for companies in reducing CO2 emissions throughout supply chains, collaboration among multiple companies both upstream and downstream within a supply chain is essential. The most effective approach to collaboration is to build an initial scheme for calculating greenhouse gas emissions and a model for reduction measures that will create a win-win situation of mutual benefit to each company.
Break away from legal compliance-based data management
Given that data management and reporting of greenhouse gas emissions are based merely on legalistic assumptions of compliance, current corporate data management systems have difficulty coping with the impact of future market changes. Therefore, the necessary first step toward realizing GX will be to manage cost data to select optimal greenhouse gas emission reduction measures based on energy price fluctuation forecasts.
Demand Side Flexibility creation for new revenue
In the future, it will become even more crucial for companies to build business models that generate new revenue in order to achieve corporate management and GX, as well as ongoing sustainable growth. In doing so, it will become more critical to recognize 2065 carbon neutrality both as a risk for corporate management, and as a business opportunity, and to utilize digital technology and one's company assets as well.
"It's imperative that Thai companies take a proactive approach to GX and maintain a close eye on policy trends and operational challenges. ABeam Consulting has worked extensively with our clients in Japan to help them meet their goals and we'd like Thailand-based companies to benefit from our experience and advice," said Mr. Ichiro Hara, Managing Director of ABeam Consulting (Thailand) Ltd.
A recent survey among business leaders in Japan by ABeam Consulting and The Japan Research Institute found that while more than 70% of companies have committed to achieving carbon neutrality, just 16% have formulated a roadmap to realizing their goals.
In addition, fewer than 15% of companies held detailed energy cost data, such as contract unit price, renewable energy levies, fuel and raw material adjustment costs and other data required to forecast future energy prices.