Making strategic moves now could be the difference between gaining market share and being stuck with higher costs for entry later on.
areas of expertise. These moves can help the new business scale faster and rapidly adapt to emerging opportunities.
decarbonization ambitions and position the organization to gain market share in a nascent but growing market. — Secure low-cost financing based on secured demand. Once captive demand is secured, established players can use their existing network and reputation to help their venture attract low-cost funding. For example, in 2017, Volvo Cars established Polestar as an independent electric-vehicle brand, leveraging its existing assets, capabilities, and customer and supplier relationships to swiftly develop a fully electric stand-alone brand. By utilizing platforms and technologies from Volvo Cars, Polestar was able to adopt an asset-light business model and efficiently create its first models. Volvo Cars’ balance sheet, liquidity, and cash position can provide support to Polestar while simultaneously executing its own plans to transition into a fully electric-car company by 2030. — Run a stand-alone new business and recruit new talent. Incumbents can consider providing assets, capabilities, and relationships to a new business. At the same time, incumbents should also consider keeping new ventures at arm’s length operationally to establish a fast-paced, agile culture and operating model, while still enabling additional equity to be added by partners if needed. Additionally, companies can look to set up their ventures with new capabilities and talent to succeed, as new parts of the value chain might require new
Now is the time to strike Companies, for good reason, may hesitate to commit resources without complete clarity on their business case for decarbonization. However, our perspective is that now is the time to strike. Cost curves for green technologies are moving down across industries, and as we discussed earlier, some green premiums may have a shelf life. Making strategic moves now could be the difference between gaining market share and securing profitable growth, versus being stuck with stranded assets and higher costs for entry later on. The three areas of action we have outlined are not a one-size-fits-all model, and implementing all three at once could indeed be a steep task. Leaders can prioritize based on factors including sector supply– demand dynamics, value chain opportunities, cost analysis, commercially available climate technologies, and evolving policy. To decarbonize operations, leaders can swiftly act on the most cost-efficient moves that still help achieve decarbonization targets. As we noted earlier, launching net-zero products and services ahead of the competition has the potential to earn green premiums, a source of capital for scaling. When to enter a new value pool may depend on the pace of technological advancement, as well as regulatory changes. While it is impossible to predict
14 “Maersk backs plan to build Europe’s largest green ammonia facility,” Maersk press release, February 23, 2021; Johannes Birkebaek and Jacob Gronholt-pedersen, “Shipping group Maersk sets up green methanol company,” Reuters, September 14, 2023.
Accelerating the journey to net zero
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