A discussion with Dr Roshan Boojihawon, Associate Professor of Strategy and International Business, University of Birmingham
The success of net zero
Net zero being a mainstream goal, with a standard methodology that applies across industries and geographies, is no mean feat. It has brought clarity on direction and a quantifiable and objective basis for decision-making. Carbon accounting is an increasingly established practice, and businesses are getting to grips with understanding their emissions footprint.
But there are still challenges when implementing on the ground
While this is underway, pivoting an organisation, irrespective of its size, towards effectively implementing a net zero transition plan is demanding.
The standards themselves and the reporting framework are still being defined. Most organisations have significant initial data challenges and must make year-on-year incremental changes to their methodologies to keep up with emerging guidance and data availability.
Secondly, flagship targets are meant to drive organisational action; they are not the end in themselves. Businesses must avoid creating an industry around data collection, processing, and reporting at the expense of action.
Lastly, while there are many examples of visionary leadership and achievements across industries, progress is not consistent everywhere. Supply chain transitions towards net zero are fragmented and unorganised, yet probably the most important transitions that need to happen if we are to truly achieve net zero transition and impact.
Focus on SMEs: an interview with Roshan Boojihawon from Birmingham University
Professor Roshan Boojihawon focuses on small and medium-sized enterprises (SMEs). SMEs are estimated to represent more than 40% of non-household emissions in the UK. They are clearly essential for the overall decarbonisation agenda, but they struggle to make progress for a variety of reasons. Argon & Co was delighted to delve more into these topics in conversation with Roshan recently and call for any insights and feedback to incorporate in the next stages of research.
Net zero as a concept has become very mainstream, with organisations in all sectors and sizes signing up. Now that there is such awareness, what is the next step?
While the concept has a lot of cut through, and it is important to be goal-orientated, there is a lot of hype and buzz around ‘net zero’, which does not always translate into action. I find it more useful to focus on the process of decarbonisation. This gets us closer to the ‘how’, which starts to speak to the changes organisations must make – incremental or radical organisational transformation required to deliver it, particularly in a way that is truly effective and meaningful to them.
What are the key aspects of this organisational transformation?
Changes at different levels are needed – both micro and macro. At the micro level, it is about every individual person’s contribution. This includes changing ingrained and long-standing mindsets and behaviours and will depend on personal investment in the topic – emotional, moral, commercial, and professional. At the macro level, it Is about the structures, systems, and processes, and to some extent the supply chain networks that make up the organisation. These must be linked back to the firm’s broader strategy and, of course, in a commercial context, must be aligned and reconciled with the financial realities of business, only then this is going to work.
Why does this matter so much for small and medium sized enterprises?
They are a crucial and under-represented node when considering decarbonisation. SMEs represent a huge proportion of businesses (even 99%, according to some). They are key contributors to value chains, between SMEs or into large and global businesses – as innovators of products and new skills, bringing proven experience and expertise, and much more. Their role in supply chains is much touted but they often lack the resources or experience to undertake the depth and scale of transformation mentioned earlier, when they are in a continuous fight for survival and growth. They often cannot react quickly enough to changes in the context and are faced with a ‘comply or die’ choice. However, this approach is ineffective in the long term in bringing about authentic change in how the company manages its transition to a net-zero future. They find themselves in a policy vacuum while experiencing extremely high financial, supply chain, regulatory, and other pressures. Essentially, they are a critically important yet underrepresented and strained or stretched group.
What can be done to support SMEs in this context?
We work with other academic institutions and businesses to get quantitative and qualitative insights into the challenges and successes SMEs are experiencing. There are undoubted successes, as we have celebrated recently, but also many challenges. The key themes are around data, skills and capabilities, and having sufficient resource.
What are the next steps in your research?
Our aim is to explore SMEs’ journeys in this transition and share policy insights, strategies, and solutions on how SMEs can best help and support their own Net Zero journeys. We recognize that every SME is unique, and so is its approach to decarbonization, and we think that policy and related support should reflect that.
We are developing in-depth case studies of SMEs through interviews and further research in the Midlands and North East. We are seeking to speak with owners, directors, and managers of small and medium-sized enterprises (SMEs) in the Midlands and The North East with 10 to 250 employees, who can show some level of carbon data in their operations. Please contact us if you are interested in taking part!
Thank you to Roshan for this illuminating discussion. If you would like to contribute to the research, share your experience and insight, or participate in future studies please contact us.
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Dr Roshan Boojihawon (PI)
Associate Professor of Strategy and International Business, University of Birmingham
