Supply Chain Enabled

Has your organisation already had its burning platform moment?

Published: August 6, 2022
Author: Xavier Hubert

The burning platform is a term that has been widely used in change management. It describes a critical initial step in any change process aimed at helping people realise the grim consequences of not changing. It is based on the analogy of someone standing on a burning platform faced with the prospect of certain and imminent death if staying put, or the possible chance (be it potentially slim) of rescue and survival if opting to jump in the cold ocean waters*.

It is understood that such a sense of urgency is required for most people and groups of people to adopt change, not because it sounds like a good idea, not because it is the right thing to do or because it guarantees a positive outcome, but because it simply could not be worse than status quo.

When, just a few weeks ago, our summer family break was abruptly interrupted by a forest fire that eventually burnt to the ground the campsite we were staying at (together with our belongings), the burning platform concept curiously came to mind. Thanks to the local authorities and emergency services, we were never in any immediate danger, but it is possibly the first time we have been so directly impacted by an event (rather unprecedented for the region) that most would undoubtedly link to climate change. Losing a week’s holiday and a few suitcases is unquestionably a first-world problem we will recover from, but while my professional involvement in sustainability in the past decade might have been motivated by the right thing to do, it is now firmly shifting to absolute necessity.

Has your organisation already had its burning platform moment? If not, you may be interested to know that companies that anticipate change are typically more successful than those that simply react to a crisis. So, if you would like to avoid awaiting a natural disaster to dramatically impact your business in order to dramatically change the way you do business, how could you possibly engineer your own burning platform? Well… here are nine moving parts to impact supply chains in Ireland, Europe and beyond that may help you build your case for change:

1 – Legally binding sectoral emissions reduction targets. Most countries are taking action to limit and reduce emissions. Ireland – for one – has decided to enshrine these into law and recently announced reduction targets for 2030 of 35% for the Enterprise sector, 50% for Transport and 75% for electricity generation.

2- EU energy consumption reduction. As a consequence of the conflict in Ukraine, and the anticipated shortage of gas due to the reduction in gas supply from Russia, the EU has recently agreed that all members would reduce gas consumption by 15% until at least next spring. While it will not be compulsory for Ireland, it will no doubt be an unnerving winter in 2022 across the bloc, hoping it will not have to come to energy rationing.

3 – EU Emissions Trading System (ETS). While it has been in place for over a decade, this market mechanism capping emissions in certain sectors such as power plants, industrial factories and part of the aviation sector will be central to the EU’s emissions reduction targets of 2030 and beyond, with reduction factors having just been increased.

4 – EU Taxonomy. This new EU legislation in place since the start of this year aims at defining and classifying sustainable investment. Primarily relevant to large corporations and financial institutions, its underlying intent is to drive funding away from carbon-intensive activities and towards more sustainable ones.

5 – UK Task Force on Climate-related Financial Disclosures (TCFD) mandate. Since last April, large companies in the UK are required by law to disclose climate-related risk information in their annual reporting. While initially limited to listed companies and other financial institutions with more than 500 employees, it is certainly a sign of things to come, in other words, a move from voluntary to mandatory climate disclosures.

6 – EU Carbon Border Adjustment mechanism (CBAM). The EU aims to prevent any carbon reduction in the bloc is offset by an increase outside of it – often referred to as leakage – which could also potentially challenge its competitiveness in the process. For this, it is implementing (2023-2026 transition period) a mechanism whereby some carbon-intensive imports into the EU will be subject to a new carbon tax through the CBAM mechanism.

7 – Carbon Offsetting and Reduction Scheme for International Aviation (CORSIA). Led by the ICAO, the UN Agency concerned with International Civil Aviation, this is yet another sector-specific mechanism, designed to integrate and/or work alongside other local measures, to reduce and offset emissions generated by the industry. It is currently going through a phased implementation and will become mandatory from 2027.

8 – CO2 emissions standards for road vehicles. The EU has recently confirmed its intention to reduce its road vehicle emissions standards to zero by 2035, effectively setting a sell-by date for internal combustion vehicles in Europe. It is not alone though; California and a few other places have also declared similar ambitions.

9 – Right to repair and other Circular Economy policy packages. The term right-to-repair refers to a growing movement aimed at giving equipment owners the practical means to repair their equipment should they wish to do so (particularly active in the electronics equipment sector). It is seeing a lot of momentum and is very often a component of numerous Circular Economy policy packages either in force or going through the legislative process.

While you may not be directly or immediately concerned by all of the above, chances are that someone, somewhere in your supply chain is and that your time might also come soon enough. The underlying theme and intent for all of these is a reduction of emissions and waste. Changing a complex ecosystem of numerous players – as most supply chains are – is neither easy nor quick and a proactive approach is therefore highly recommended.

(*) Should you be interested to learn more details on this story, I would recommend reading “Managing at the Speed of Change” by Daryl R. Conner, 1993.

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