Predictions 2022: CEOs and top leaders share how achieving net-zero targets will reshape the world

The signs of an unsustainable world are all around us, from climate change to growing social inequality. Addressing these challenges requires leaders change how they think, act and plan.

Taking such dramatic shifts seems impossible -- but could transform the world. The World Economic Forum asked a range of top leaders from sectors such as energy, technology and more how the world would change if we reached our global climate goals and got net-zero right. Here are their visions -- and the transformation we could see ahead for collaboration, equity and even how we grapple with uncertainty.

The Italian island of Sardinia, largely thanks to its “Emerald Coast,” is a fashionable tourist destination, but it could also become a model for the energy transition. The island has no gas capacity and is making the most of its natural abundance of wind and sun. According to our calculations, by adding 4 to 5 gigawatts of renewable capacity and 1 gigawatt of storage capacity, we could meet the island’s energy demand. Indeed, a European study argues that 3.1 megawatts could be added merely by installing solar panels on the island’s roofs. Furthermore, the “Tyrrhenian Link” project (a 950 km double underwater cable that will be laid from Sardinia via Sicily to Battipaglia, near Naples) will enhance the island’s electricity connection to the Italian mainland by 1 gigawatt.

Moves like these to commit to a zero-emissions future would entail an investment of 15 billion Euros by 2030. But these changes would also lead to the creation of between 10,000 and 15,000 jobs in the process, helping to diversify the opportunities available on the island. It would also mean remote destinations like this could become truly green and self-sufficient while also acting as labs for green energy solutions featuring electric cars, trains, hotels and homes, all powered by 100% renewable resources. Remote islands could become independent hubs for leading clean technologies.

-Francesco Starace, CEO and General Manager, Enel

A net-zero world will embed sustainability-related data into core strategies and processes. Embedding sustainability-related data into business processes will enable holistic sustainability management of all important ESG dimensions. It will allow companies to assess and optimize their carbon and waste footprints, support responsible workforce management, and foster ethical working conditions. Critically, this shared data will help firms collaborate across companies, geographies, and industries, ensuring processes remain circular, regenerative and innovative.

In our current globalized environment, business processes already extend beyond a company’s own four walls. However, in a world that has achieved net-zero goals, enterprise technology and digitalization will have unlocked transparency across whole value chains and product and service life cycles. Leaders will not question the value of sharing such data, understanding the greater possibilities that can be possible.

Companies in this net-zero world will not struggle to manage their “green line” in addition to top and bottom lines. It will be common to see leaders who have made sustainability profitable and profitability sustainable. These leaders will have long committed to embedding sustainability into their core operations, ensuring climate goals stay met and allowing companies to thrive.

–Christian Klein, Chief Executive Officer and member of the Executive Board, SAP SE

Genevan philosopher, Jean-Jacques Rousseau once said: “The world of reality has its limits; the world of imagination is boundless.” These words capture the power of imagination and are the foundation for ‘Alternativism,’ an approach he espoused that embraced a readiness to experiment and challenges to existing ways of thinking.

Businesses thriving in a net-zero world will achieve incredible transformations by pivoting on alternativism. Imagine electrolysis in your car instead of your chemistry lab. Automakers who pursue breakthroughs in the electrolysis process could convert hydrogen into a complete green fuel, making clean mobility accessible and affordable. Imagine hyperloops replacing flights for truly climate-conscious travel. Worldwide flights produce approximately 1000 million tons of CO2 in a year. One estimate by Virgin Hyperloop finds we could reduce fossil fuel emissions from flying by 58 percent if every passenger flight between about 310 miles and 930 miles worldwide were replaced with hyperloop travel run off renewable electricity.

Current technologies would only help us collectively achieve half of our net-zero goal, but a net-zero world will have embraced these and even other innovations we haven’t yet imagined thanks to alternativism. A world that has embraced that spirit will have unleashed tremendous possibilities and keep the flame of hope alive.

-Anish Shah, Managing Director & CEO, Mahindra Group

If we get net-zero right, by 2050 we will live in a technology-driven, cost-efficient low-carbon and efficient world, where sustainable and affordable energy are available for every citizen and industry.

To achieve this we need regulation focused on effective emissions reduction rather than rules which impose certain technologies to cut emissions. We cannot afford to keep confusing decarbonization with electrification because this is only part of the solution. The key to fight climate change in the most cost-effective way is letting technologies compete in price and effectiveness.

Thus low-carbon fuels, a near-term solution to decarbonize current engines and hard-to-electrify sectors, or waste-to-fuel circular economy technologies that produce decarbonized fuels and helps solve the growing global waste problem can be enabled.

Greenhouse gases know no frontiers; a global emissions price will make conditions equal everywhere and raise the bar for companies and consumers, allowing industries with strict environmental standards to compete where others today gain unfair advantages emitting more CO2. Result: Real reductions everywhere rather than delocalization. Also, clear, transparent information on costs and repercussions can change habits towards a more efficient consumption and production model.

A successful transition must work for everyone, with fair costs to guarantee a real and inclusive low-carbon future.

-Josu Jon Imaz, CEO, Repsol

Traditional business planning and capital allocation processes tend to be linear in nature. The energy transition makes this approach difficult as leaders wrestle with the uncertainty of climate policies, energy technology pathways and market shifts in demand, supply and pricing.

Strategy development which is scenario based and more frequent tracked is a better approach. Future processes will take into account a wider range of scenarios and pathways that investments and other targeting can be assessed against. This means exploring and generating a set of potential outcomes and exploring them from a technology, market and customer perspective. Businesses will then test to ensure that these scenarios are internally consistent and not just collection of assumptions. With this backdrop, business will then be better able to assess if large or critical investments will actually pay off under different conditions, while checking that current businesses continue to perform at expected levels.

Such a reality will require leaders to have a more detailed grasp of their industry and adjacent industries to understand the different potential pathways in front of them (including how and where different technologies compare). This means more iteration, more depth and more understanding across the leadership team before and as plans and investment decisions are made. This also means better and broader communication with employees and wider stakeholders.

-Claire Lawrie, Senior Managing Director - Energy Transition, FTI Consulting

In a net-zero world, companies recognize that they are deeply rooted in society. They have shifted from focusing solely on individual short-term goals (such as quarterly metrics), to allow for long-term goals (such as sustainability and prosperity). In this future, the private sector keeps society’s happiness and progress top of mind, prioritising that over blindly pursuing profits.

Companies in this world will see the benefit of working with rivals, collaborating and sharing data. These business leaders listen to the views of all their diverse stakeholders, from customers and employees to the community at large. These leaders are open, communicating future goals and plans, accepting sensible criticism and adapting goals for the greater good.

In short, these leaders will have taken on heavy responsibility not fully embraced in our present day. These leaders will have internalized the true meaning of what is often label ‘ESG’ or ‘Sustainability’ today or what I prefer to call ‘human capitalism’, a focus on a long-term shared prosperity. As a result, they will have had a true and active role in reshaping a sustainable world and shifting away from a selfish and deeply polarized society. They will pay attention to the young and engage them for the future. These approaches to the greater good will restore trust, creating a virtuous cycle that allows for faster progress toward our common goals than we can imagine today.

These leaders understand that in this global interconnected world, we cannot only think of ourselves. They realize that humans are mortal but society is immortal.

Shunichi Miyanaga, Chairman of the Board, Mitsubishi Heavy Industries