The how and why of Net Zero

How organisations are creating movements for change

Tom Whitwell
May 9 · 5 min read
Getting together with cross industry leaders and change makers to chat about one of the biggest challenges this generation faces; Climate Change. Pre-read for the Fluxx Exchange.

Back in early 2020, as the pandemic hit, businesses found themselves turned upside down almost overnight. Companies delivered a decade’s worth of digital transformation in a week. We all changed the way we work, probably forever.

As customer priorities changed, companies changed their products and services, faster than they’d ever done before. Emboldened by the pace of change, business leaders are looking forward to two great challenges:

The first is embracing a new hybrid way of working. By addressing the tangle of challenges and opportunities, they are creating a workplace that is purpose-led, flexible, motivated, able to anticipate customer needs, not just respond to them.

The second is even more dramatic. Companies must learn how to do business, grow and create profit without depleting natural resources. By 2050, the UK economy will be at net zero, no longer contributing to damaging climate change. Many companies say they will reach net zero even sooner than that: 2040, 2030, or even earlier. Google and Facebook, the 4th and 5th biggest companies in the world, say they have reached net zero already.

Fluxx works with organisations like Highways England, L&G and Mars who have set ambitious targets. For them and others like them, the race to net zero forces them to innovate, to get closer to customers, to collaborate and to embrace change.

The fact is that every company, every business model will need to change. If you’re selling insurance, what are the climate impacts of your investments? Can you stop your biggest clients switching to a firm offering “zero carbon insurance”? Can you attract the brightest staff who want to work on the biggest, most interesting problems?

As business models are being disrupted, leaders are expected to show three things: a strategy, a plan to execute that strategy, and evidence that the plan is underway. These strategies are in three areas:

  1. Technology — the systems and hard innovations that will allow, for example, production of low-carbon concrete, or zero emission heavy goods vehicles.
  2. People — the behaviour changes required within your teams, and all the new capabilities they’ll need to work in a net zero future.
  3. Customers — how their needs and desires will change, and how your businesses will have to adapt to meet those new needs.

In our experience at Fluxx, many organisations are focused on the technology. In some ways this is the hardest and longest-term problem. Many aspects of the net zero economy are only prototypes, or are still too expensive to use at scale. But it’s the people and customer aspects that interest us most. They’re just as important and they don’t require new technology, just new ways of thinking, new ways of working and a few imaginative leaps.

The human side of Net Zero

We’ll always get what we always got, if we always do what we always did.

Hitting net zero is about behaviour change at scale; helping every team to think differently and make decisions differently.

Legal & General Insurance used a nine month incubator programme to light a lot of small fires: creating startup-like teams to work on diverse projects across the business. This helped them build a sense of purpose that felt organic. People can see the positive impact that they’re having, see that they are building together towards something remarkable.

Bernie Hickman, CEO of Legal & General, saw that in addition to creating strategies and declaring ambitions net zero targets, he could leverage the power of people in his sector and beyond to create change. “Our business is about joining up people who’ve got money … We’ve got expertise, we’ve got relationships with people from every sector, and we can open doors and get people together and get people talking about climate change. “We can’t stand around saying, ‘Someone ought to be doing this’. Let’s try to make some stuff happen.

The business side of Net Zero

With every big economic shift there are winners and losers. The old order is broken. New players emerge, old players pivot and become rejuvenated. What happens next is that green and net zero products spread outside these core areas.

Green energy is obvious, but what happens when customers demand green insurance, green banking, green food, green pensions, green publishing? Companies need tools to reach net zero, and those tools don’t yet exist.

There’s a wrinkle here. To build these new products, we need to understand the needs of our customers. But those needs — in relation to net zero — can be complicated and contradictory, a mixture of emotional, social, practical and financial concerns.

Fluxx worked with BEIS to uncover the real motivations of small businesses around energy use. We met business owners who were motivated by ethics and purpose, and others whose motivation was looking after their people. Existing energy efficiency messages were all about financial savings, so just didn’t resonate. By spending time really listening to customers, we were able to shape messages that would be more effective.

When the London-based fintech Cushon found that 70% of employees were concerned that company pensions might invest in businesses contributing to climate change, they created a Net Zero pension. For any company, shifting pension a provision might be an easy ‘regret free’ way to make a difference. Companies and individuals make thousands of similar decisions each year, which adds up to a vast potential for market change, a huge opportunity.

Tom Whitwell is a Managing Consultant at Fluxx, a company that uses experiments to understand customers, helping clients to build better products. If you’d like to see ways we’ve helped companies and could help yours, take a look at our site: Fluxx.uk.com, subscribe to our newsletter and/or read the free download of our new book What we get wrong about people, or grab a coffee with Tom at: tom.whitwell@fluxx.uk.com

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