Innovation & Technology

Why Is Corporate Cleantech Adoption Lagging, and What Can Be Done About It?

Here are smart tools and strategies organizations can use to overcome three major barriers to cleantech adoption, to drive broader climate action and achieve their sustainability goals.

Brand Provided | By Sarah Derdowski | Published 5 months ago | About a 4 minute read

Image: Irina Iriser

We’re at a technological inflection point for the climate: Organizations are facing ever-increasing pressure to decarbonize from regulators, investors, customers, employees and communities. And they face significant costs if they fail to act: According to McKinsey, failure to decarbonize could jeopardize up to 20 percent of profit by 2030; stricter environmental regulations will bring financial penalties to non-compliant organizations, and over 70 percent of workers now consider a company’s environmental impact when choosing an employer — making it harder for less climate-friendly companies to attract and retain talent. Like workers, consumers also increasingly prefer more environmentally conscientious companies — a preference that will negatively affect both the bottom line and the reputation of last movers.

Despite these pressures, many organizations still aren’t adopting clean technologies fast enough to limit global warming enough to curtail the risk of increasingly devastating climate disasters. According to Accenture’s Destination Net Zero report, 37 percent of the 2,000 largest public and private companies have adopted net-zero targets; but only 18 percent are on track to reach net zero by 2050.

What’s causing this gap between climate ambitions and reality, and how can organizations work to close it? Organizations can use smart tools and strategies to overcome these three major barriers, accelerate their climate action and achieve their sustainability goals.

Lack of technology confidence

The first barrier stems from corporations’ awareness of their lack of deep understanding of clean technologies and how to measure associated risks. This results in reluctance to pioneer brand-new solutions, since corporations want assurance that adopting new technology will produce the promised results. Ironically, the corporations that have the resources to adopt clean technologies are often also the most risk-averse — but now, growing economic and regulatory pressures have made it a greater risk for organizations to not address sustainability challenges.

To help de-risk climate action, demonstration projects are often an ideal first step for organizations to test a new clean technology. For instance, Wells Fargo recently conducted a pilot project with Turntide Technologies’ energy-saving motors through the Wells Fargo Innovation Incubator. Both pilots reported significant energy savings, including a more than 50 percent power reduction for average supply fans. Testing new technologies on a small scale helped de-risk and validate their use on a larger scale: Wells Fargo is now exploring opportunities to install the technology in more locations to help reduce its energy consumption and reach its sustainability goals.

Organizational dynamics

Like a lack of confidence on the matter, organizational dynamics can also challenge cleantech adoption. While recent years have seen more and more companies adopt new roles such as Chief Innovation Officer and Chief Sustainability Officer, successful cleantech implementation requires more. For instance, although sustainability initiatives need to be mandated from the top down, they’re often reduced to “checking a box” — a compartmentalized approach and attitude that comes from a lack of clarity about the value added by such initiatives. Effectively addressing corporate climate risks requires a cultural and mindset shift to establish accountability across the entire organization.

To cultivate a more productive, holistic approach to sustainability initiatives, organizations can consider participating in peer working groups. These groups share learnings about how to streamline time and resources when adopting new technologies, enhancing overall operational effectiveness. Collaboration can also accelerate cleantech adoption for historically slow movers, such as state and local organizations, by providing them with earlier access to relevant information and technology. Working together and sharing resources can help these groups move from laggards to leaders in cleantech.

Siloed ecosystems

Similar to organizational dynamics but on a larger scale, the final barrier to cleantech adoption is a tendency towards siloed ecosystems. Both companies and industries often work toward sustainability goals in isolation; even if one company or industry discovers a solution to a common environmental problem, other companies and industries might never know. This inhibited flow of information also hinders clean technology progress. That’s why addressing urgent climate challenges requires a shift from competition to collaboration, both within and across industries. Sharing information across industries can save time and money while also accelerating the pace of cleantech adoption.

If we’re to have any hope of a sustainable future, organizations must confront the barriers that have hindered progress. By fostering technology confidence through demonstration projects, cultivating a culture of accountability and collaboration across organizational levels, and breaking down silos both within and across industries, companies can achieve their sustainability goals. Organizations that rise to this challenge will not only help the global fight against climate change — they’ll also position themselves as leaders in the new, low-carbon economy.