Net Zero Business Models

12PREPARING TO LEAD THE TRANSFORMATION: KEY ELEMENTS OF SUCCESSFUL TRANSFORMATIONS

“A transition to net‐zero emissions would entail an economic transformation that would affect all countries and all sectors of the economy.” ¹

—McKinsey & Company

Before a company chooses its Pathway, it must understand the process of change to achieve net zero. According to Dean and Linda Anderson, the co‐founders of the transformation consultancy Being First, there are three types of change: developmental change, transitional change, and transformational change.²

THE THREE TYPES OF CHANGE

Developmental change. Developmental change improves what already exists. It is incremental and usually can be accomplished through existing leadership processes. Developmental change is common. It is what good leaders do on an ongoing basis to improve the performance of their existing operations³ (see Exhibit 12.1).

EXHIBIT 12.1 Developmental change

In the context of net zero, eco‐efficiency processes and systems represent developmental change. A Pathway One company with low carbon intensity, such as Microsoft, may be able to get to net zero by making incremental changes in its business, such as electrifying its fleet, consuming renewable energy, and revising its employee travel policy. If a company can get to net zero solely by making incremental changes, then its complexity of change is low, and ...