The transition to net zero is greatly advancing capital programs for energy and resources companies.
These programs are complex and rife with new challenges, putting capital expenditure and engineering functions squarely on CEOs’ agendas. What’s more, new economic realities, such as rising carbon prices, are intensifying pressure to deliver projects fast and on time.
On October 21, 2022, McKinsey’s Global Infrastructure Initiative convened a roundtable discussion in Tokyo titled “Achieving Project Excellence in the Race to Net Zero.” The audience comprised owners, operators, and senior leaders across engineering, construction, real estate, and technology to discuss key questions such as the following:
- How can we refresh and reset capital strategies to achieve net-zero outcomes?
- What does it take to develop a strong delivery ecosystem and set projects up for success?
- How can capital project leaders achieve predictive transparency, navigate regulatory and stakeholder complexities, and build distinctive teams?
Four key themes emerged from the roundtable:
- Developing and delivering successful portfolios requires an inclusive approach across multiple dimensions. Bringing the voice of local stakeholders into the company and ensuring appropriate representation to influence projects can encourage a shift from partnership to cocreation.
- Engineering and construction lag in the adoption of new approaches and technology. An agile approach in engineering has helped to accelerate projects and could be adopted more widely. Building information modeling can help project adoption and can also evolve to incorporate carbon implications. The pace of new asset delivery and labor challenges will continue to force an increased adoption rate.
- A singular focus on carbon could hinder progress. The sector must focus on all interlinked elements of sustainability, not just carbon emissions. These elements include, for example, biodiversity loss and nature-based capital. A data-driven strategy that tracks types of climate impact can help avoid overindexing on carbon for both existing assets and new ones.
- We can bring the transition to net zero into all aspects of our lives. Starting a personal carbon balance sheet can create individual awareness of certain decision implications and reframe thinking across both personal and professional choices.