Sustainability LIVE: Climate Week – The Future of Net Zero

November 12, 2024

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Industry leaders from Citi, EY and AWS share strategies for navigating net-zero challenges, regulatory impacts and sustainable growth

At Sustainability LIVE: Climate Week NYC, the panel on “The Future of Net Zero” brought together executives from Citi, EY and Amazon Web Services (AWS) to explore how organisations can balance economic growth with sustainability goals, tackle regulatory complexities and harness technology for environmental impact.

Moderated by Steven Downes, the panel featured:

Tim Adamson, Chief Administrative Officer and Sustainability Director at Citi
Michelle T. Davies, Global Head of Sustainability Law at EY
Rahul Sareen, General Manager of Sustainability and AI Solutions at AWS

Together, the panellists shared their insights on the biggest challenges, strategies and opportunities for businesses in the net-zero landscape.

Navigating scope 3 emissions and client impact

Tim Adamson opens the discussion by outlining Citi’s approach to reducing emissions, particularly its Scope 3 emissions, which are primarily linked to client financing.

“For Citi, approximately 97% of our emissions are in scope 3,” Tim explains, noting that the bank’s net-zero success depends on the performance of its clients.

Citi’s strategy involves setting emissions reduction targets in line with the Paris Agreement and encouraging clients to align their own goals.

However, Tim acknowledges the sectoral differences in decarbonisation with some industries, such as transportation, showing faster progress than others, like heavy industrial sectors.

He emphasises that Citi’s role is to support clients’ transitions while balancing economic demands. “Our clients’ success is our success,” he remarks, adding that banks must consider the nuances of each industry’s transition journey.

Rahul Sareen from AWS echoes this, noting that AWS focuses on helping clients manage their emissions data and improve their sustainability reporting. Many clients struggle with gathering and standardising data, which is essential for informed decision-making in sustainability.

AWS’s AI and data solutions aim to streamline data management and reporting processes, helping organisations like global automotive and mining companies automate workflows, reduce data processing times and ensure compliance.

The Future of Net Zero Panel

The challenges of data management and technological solutions

The panellists agree that data acquisition and management are among the biggest hurdles for businesses on the path to net zero.

According to Rahul, many organisations still rely on outdated methods, such as Excel spreadsheets, to manage emissions and compliance data, resulting in lengthy and inefficient processes. AWS addresses this by offering clients tools for collecting, ingesting and analysing data at scale, enabling them to make data-driven decisions more effectively.

“Data is at the heart of decarbonisation efforts, but many organisations don’t know where to start,” Rahul explains.

He shares an example of a large automotive client that AWS helped reduce energy costs and emissions across 82 global manufacturing sites by implementing AI-powered energy optimisation solutions. For AWS, helping clients use technology to accelerate sustainability efforts is central to its mission.

The impact of regulatory pressures on net-zero strategies

Michelle T. Davies from EY provides insight into the evolving regulatory landscape, particularly the influence of European Union regulations on global net-zero strategies. She categorises regulations into three main areas: disclosure, operational and greenwashing.

Disclosure regulations, such as the Task Force on Climate-related Financial Disclosures (TCFD) and the Corporate Sustainability Reporting Directive (CSRD), are designed to help financial institutions assess the sustainability risks of their investments.

Operational regulations, including the EU’s deforestation rule and packaging requirements, aim to create a level playing field by reducing dependence on imports from high-emission economies.

Michelle observes that many companies initially approach each new regulation in isolation, resulting in fragmented data management and missed synergies.

“We often see a ‘whack-a-mole’ approach to regulation,” Davies notes. However, organisations are beginning to centralise their sustainability strategies, recognising the interconnectedness of these regulations. Michelle highlights the importance of aligning regulatory efforts with internal goals to ensure a coherent and streamlined response.

The Future of Net Zero Panel

Balancing economic growth and sustainability

The panellists discuss the common misconception that economic growth and sustainability are mutually exclusive.

Tim argues that sustainable growth is achievable in the long term, especially as industries transition to circular economies.

“Our economy remains linear, with limited recycling, but in the long term, sustainability will cut costs and improve efficiency,” he says.

Rahul shares AWS’s experience working with clients to align sustainability with cost savings. By helping an automotive client optimise its energy usage, AWS demonstrated that decarbonisation could simultaneously drive down operational costs.

Another AWS initiative with a battery manufacturer created a digital tracking system for battery lifecycles, enabling the company to explore new revenue streams by selling used batteries for secondary applications, such as energy storage.

Michelle adds that reputational risk is increasingly influencing boardroom decisions, with many stakeholders holding companies accountable for environmental impact.

“Reputational loss can quickly translate to financial loss,” she says, noting that institutional investors are pressuring companies to adopt rigorous sustainability policies. This shift in stakeholder expectations means that sustainability is not only about compliance but also about safeguarding brand value and securing long-term success.

The Future of Net Zero Panel

The role of individual responsibility and future outlook

In closing, the panellists express optimism about the future of net zero but acknowledge the ongoing challenges. Tim highlights the importance of individual responsibility, noting that consumers’ decisions and actions are beginning to have a measurable impact on environmental progress.

“Individual responsibility is permeating more than ever,” he says, sharing an example of friends who have voluntarily reduced air travel to limit their carbon footprint.

Rahul is excited about the potential of technology to drive meaningful change. He points to advances in generative AI, which can significantly reduce the time needed to analyse regulatory requirements and generate ESG reports, allowing companies to act faster and more accurately.

Michelle stresses the importance of accessible carbon credits, especially for developing countries, as a necessary tool for global decarbonisation.

The panel’s discussion at Sustainability LIVE: Climate Week NYC highlighted the complex yet promising journey toward net zero, underscoring that sustainable progress will require a blend of regulatory alignment, technological innovation, and cultural shifts.

As businesses continue to grapple with regulatory pressures, data challenges, and evolving stakeholder expectations, the strategies and insights shared by Citi, EY and AWS offer a roadmap for achieving long-term success in a net-zero world.