Kathleen Abbott leads Arcadis global business development, running strategy on key clients, sector priorities and city programs.
The call to action for climate change grows louder each year, keeping decarbonization firmly at the top of the business agenda. Many leaders still grapple with a crucial part of the conversation: How do we pay for it?
Companies often encounter roadblocks, including operational disruptions, physical limitations or a lack of knowledge surrounding which technologies to trust. The key ingredient to making effective decarbonization a reality lies in mastering the joint technological and financial roadmap. The decarbonization process is most successful when built on a foundation of close collaboration with project partners—from design to financing to delivery. In fact, through AI-powered delivery models and innovative funding mechanisms, business leaders can jumpstart their progress on carbon commitments while avoiding upfront capital investment and increasing profitability.
Decarbonization is important to me. At our organization, where I serve as a senior executive, we help corporations in their commitment to decarbonization, especially in the industrial manufacturing space. I see all the time the real benefits that our clients get when they can make the leap from decarbonization strategy to execution. But in talking with them, I also hear it’s a tough gap to leap over when they need to align operational, technical and financial parts of their business. As we’ve started to offer digital solutions and more recently AI-based tools and access to financing, I see more companies making decarbonization a reality.
Designing For Scale With AI
By adopting an AI-led approach to project definition, projects can be scoped for maximum speed, value and delivery. There is a new class of software companies that offer AI-powered tools to uncover energy-related costs and carbon savings, and working with these companies is a powerful way to accelerate the path to real results.
AI can look deep into asset and equipment performance to uncover hidden optimization opportunities that save costs right away, while identifying replacement interventions to maximize impact and drive greater success. The high-resolution data and continuous monitoring that these AI tools are based on further drive ROI by extending equipment lifespans, reducing the need for premature replacements and avoiding unnecessary capital expenditures. While there are other options in the market, we’ve had good experiences partnering with CoolPlanet and EkkoSense.
It’s also important not to get lost in the ROI for individual projects or assets. By bringing this laser focus across multiple assets, businesses can deliver significant bottom-line and sustainability benefits at scale. Scaling is what ultimately creates efficiency because it drives unit costs downward and allows the approach to be used repeatedly. A whole portfolio view at scale also enables bundling, where multiple projects with low and high ROI are combined into one balanced business case, allowing you to do more.
Such tools provide the visibility to guide these decisions, making staff more productive, driving better coordination from the plant floor to the boardroom, and making it easier to demonstrate ESG credentials to customers and stakeholders.
Ultimately, this data-driven methodology ensures that every dollar is invested in solutions that are not only sustainability-forward and technologically sound but also financially optimal, guaranteeing tangible, long-term value for the entire enterprise.
Crafting The Right Financing And Tech Stack
Business leadership should focus on strategic capital deployment, leaning on companies that provide expert energy technology and sustainable financing solutions. Engaging in integrated financing models provides assurance and significantly de-risks a company’s decarbonization roadmap.
For example, Honeywell, a building technology leader and one of our partners, offers a guaranteed energy savings funding model, lowering operating expenses (OpEx) and eliminating upfront capital expenditure (CapEx). Partnering with such companies delivers building portfolio improvements, with integrated financing as a key feature.
This collaboration eliminates CapEx through flexible financing that allows for repayment from the energy cost savings that are created by technology implementation. This structure can even create an immediate bottom-line impact for companies by reserving part of the cost savings earmarked for repayment. Siemens is another comparable company that offers this kind of model, tying together no CapEx models with guaranteed energy savings.
There are also indirect financing benefits to be gained from the technology stack of companies that facilitate greater clarity in the financial benefits assessment. For example, our partner, Schneider Electric, a leader in the energy management technology space, has made its entire equipment catalogue carbon intensity accessible to the industry, which helps give greater certainty on whole life carbon (and cost) impact for its products. OneClickLCA also offers data-driven insights into the cost savings from sustainable design choices, such as reduced material use, supporting informed decision-making.
In addition to private-led financing, public funding can help subsidize industrial energy optimization. While direct federal subsidies are less common, other public options remain. State-specific mechanisms include clean energy tax credits, cap-and-trade programs and utility incentives to offset initial costs.
A blended funding approach enables leaders to pursue transformative projects aligned with sustainability goals, ensuring data-driven strategies accelerate progress toward net zero.
Maximizing The Decarbonization Investment
To maximize decarbonization investment, businesses should keep the following considerations top of mind, from the earliest project design stages to final delivery:
• Leverage AI in the design phase. Use it to uncover hidden cost-saving opportunities and apply the findings across your entire portfolio to drive down unit costs. This also allows services for greater efficiency and alignment within an organization.
• Select a tech stack that maximizes impact. Base your choices not just on initial design needs, but also on factors like whole-life carbon intensity data. This will maximize the impact you’re looking to achieve.
• Create a blended financial strategy. Combine integrated private funding with targeted public funding (like clean energy tax credits or utility incentives) to meet your business needs and simultaneously maximize your return on investment.
Linking technology and financing is critical to making the business case for decarbonization. Realizing the full value of carbon savings requires a holistic focus on design, operations, equipment, financing and carbon footprint. This outlook will help business leaders unlock the full potential of decarbonization and drive planet-positive and bottom-line business results.
Forbes Business Development Council is an invitation-only community for sales and biz dev executives. Do I qualify?
