Tackling climate change remains a huge and pressing challenge for Malaysia, Singapore and the global community. We need to reduce global emissions by half by the end of the decade and achieve net zero globally by 2050 to keep global warming in check.
Achieving this need will require innovation, investment, and new engineering solutions that allow us to significantly reduce emissions while also adapting to accelerating climate-related adverse events. It is clear we must overcome substantial gaps across topics, ranging from climate finance to climate technologies and equitable intervention to embed truly systemic change.
There has been some remarkable acceleration in global climate commitments over the last few years. Country-level net-zero targets currently encompass over 90% of global GDP. Over 5,500 major businesses and investors have committed to achieving corporate net-zero emissions under the Race to Zero campaign. Malaysia has also made its own ambitious commitments, with an aspiration to achieve net zero as early as 2050. This has also catalysed action among Malaysia corporates, with a step up in commitments towards net zero. Singapore has similar plans.
Achieving these goals is a significant ask and will require both partnership and innovation to bridge notable gaps. Catalysing the required economic transformation to deliver on these ambitions will require buy-in from collaborators across the public, private, and social spheres.
Global partnership is powering success
Given the pace and scale of transformation required to achieve these goals, collaborative efforts and partnerships will be key to success. The interdependent nature of the crisis, and required solutions, will necessitate a joint and collective action across both private and public sectors.
If companies are to achieve sustainability across the entire value chain, they need to act aggressively and collectively to transform their end-to-end ecosystems. In the scale-up of electric vehicles (EVs) for example, governments will be vital to set incentives, policies and regulations. Charging infrastructure will also need to be expanded substantially, with implications on the end-to-end electricity value chain from generation and grid investments to charging infrastructure build-out. Automotive manufacturers and their supply chains will need to partner to scale-up production and ensure resilient and sustainable supply chains. This represents nothing less than a full industry transformation.
Moreover, the operational reality is that 90% of greenhouse gas emissions (GHG) companies generate are outside their direct control, captured in so-called Scope 3 emissions. Mitigating these emissions will require action in partnership.
On the demand side, collaboration across stakeholders is essential to mobilise action across corporates and consumers to create appropriate demand at scale. This is vital to achieve required economies of scale, inspire early movers of climate innovation, and ensure positive signals to producers.
On the supply side, stakeholders will need to collaborate and coordinate highly complex cross-sectoral interdependencies to deliver integrated low carbon solutions. This includes preparing end-to-end supply chains, addressing bottlenecks, ensuring a timely transition, and building out capabilities. Efforts will also be needed to mobilise funding and financing and enact supporting policies.
Coalitions are key to success
Coalitions are vital but alone they are no guarantee of success. Getting them right is the key to unlocking opportunities. BCG Henderson Institute studied more than 50 Corporate Sustainability Alliances (CSAs) globally to understand how success can be delivered. Its findings, reported in How to Build a High-Impact Sustainability Alliance, revealed the most effective alliances excelled by understanding whom to collaborate with, what was needed to accelerate progress, and how to mobilise collective action.
• Think strategically about who you collaborate with
Start with highly-committed market leaders to act as champions. CSAs founded by a group of market leaders were 1.7 times more likely to achieve impact at scale. Work to actively engage members across the value chain — CSAs with diverse membership are four times more likely to achieve impact at scale. Finally, enlist external expertise to guide your journey, including academic researchers and third-party certification organisations.
• Focus on activities that drive impact
Establish industry norms and principles. CSAs that create alignment around robust operating standards, supported by detailed metrics and reporting protocols, are 2.7 times more likely to create impact at scale. Create data transparency for members, allowing you to monitor and maintain progress. Drive innovative solutions through collaborative R&D projects. Finally, take a proactive stance towards business diplomacy for greater sustainability and business advantage.
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• Understand how to mobilise collective action
Build trust upfront, and establish a culture that can unlock mutual benefits for all collaborators. Create a detailed secretariat—CSAs staffed by professional teams are 2.5 times more likely to deliver impact at scale. And last but not least, measure and report progress against a clear impact strategy.
Leading by example
At BCG we recognise that acting alone is not enough, and we are proud of our partnerships with various leading organisations as founding members of the First Movers Coalition and Breakthrough Energy Catalyst which looks to catalyse global demand, investment and innovation for critical emerging solutions key to tackling climate change.
Collaborations to further the sustainability agenda across a range of topics are also key, such as the Alliance to End Plastic Waste. Global alliances and partnerships are also crucial to ensure the pace of action in decarbonising various sectors of the economy.
Examples range from the Maersk Mc-Kinney Moller Center for Zero Carbon Shipping and the Global Center for Maritime Decarbonisation for the shipping industry to the Aviation Climate Taskforce for the aviation industry.
Building a future in partnership
CSAs and public-private sector platforms can bring together a wide range of stakeholders, not just businesses and suppliers but also regulators, policymakers, academic institutions and more. Participants are motivated by the potential across three areas — the ability to enable sustainable operations, shape context and sustainability, and help drive innovation.
Throughout history, collaborations and partnerships have been critical to solving some of mankind’s most important challenges — the Covid-19 vaccines offering perhaps the most contemporary and critical example.
Collaboration enables the global community to mobilise action on the appropriate scale and build the momentum required to effect true change. The solution to the climate crisis will be no different. The value of collaboration should be nothing new to the business. What is new is the unprecedented importance of the end goal in this endeavour.
Joel Kwong is a partner with Boston Consulting Group while Marc Schmidt is managing director and partner. They are with Boston Consulting Group’s Climate & Sustainability Hub for Innovation in Asia, which aims to pave the way towards building a more sustainable future in the region