Resource clean sheets assess component costs and carbon emissions at the same time—so designers and engineers can model design and production choices without compromising emissions goals
CEOs increasingly recognize the green imperative. They understand that in the coming decades, environmental sustainability will drive core aspects of their businesses: financing, product portfolio and design, the supply chain, sales and after sales, branding, purchasing, and even the production footprint. Beyond setting ambitious targets—such as aiming to be carbon neutral
by 2030—some companies are already tying executives’ salaries to climate targets.
Yet according to the latest UN Global Compact progress report, less than 25 percent of companies surveyed consider their efforts to mesh climate- change policies into their overall strategies to be on track.1 But even at companies that have set explicit emission-reduction goals, senior executives
tell us that they struggle to balance short-term cost pressures with their longer-term strategic objectives, such as sustainability. For many, making the business case for sustainability remains a tall order.
But action can no longer wait. To meet the 2015 Paris Agreement’s global-warming cap, emissions must be halved every ten years until 2050. That is another tall order, given that just between 2000 and 2010, the rate of increase in CO2 emissions doubled. So how can companies advance their carbon- reduction goals—and their broader sustainability goals—while operating profitably?
There are many avenues for pursuing sustainable strategies, but perhaps the single most powerful one is embedding sustainability into product
design, which determines an estimated 80 percent of the future carbon footprint. Until now, such an approach—working with CO2 life-cycle assessments and “should cost” estimates—was cumbersome. But by integrating robust methods of cost and carbon- emission analysis, a new methodology called “resource clean sheeting” makes it possible.
This article was originally published on the McKinsey & Company’s website.