To respond to the climate emergency and hit the 2050 net zero targets set by the Paris Agreement and Europe’s Green Deal, we need to tackle our carbon and environmental footprint. Businesses are at the forefront of meeting these targets and are under regulatory pressure to do so. In this article, we take a look at the potential opportunities for companies that embark on an energy/climate transition.

An energy/climate transition means a transition spanning not only energy-related CO2 emissions and a low-carbon strategy, but also water, waste, biodiversity, and the protection of natural resources. Europe’s Corporate Sustainability Reporting Directive (CSRD), which has been applicable since 1 January 2024, requires companies, including listed small and medium-sized enterprises[1] as well as mid-caps (from 2027 based on 2026 data), to report on their sustainability impacts and describe their environmental, social and governance (ESG) trajectory. Jérôme Teissier, chairman of engineering and consultancy firm Naldeo, which specialises in energy and climate challenges, says that all companies are concerned no matter what sector they operate in, from industry to construction and services. By placing the entire value chain under the microscope, CSRD’s entry into force affects them all.

The CSRD requires companies to be transparent about their impact and their pathway to improvement. They also have to consider their environmental footprint as well as their plan to reduce it. This transition presents genuine opportunities, first and foremost from a business perspective. The energy crisis and soaring gas and electricity prices forced companies to act to rationalise and reduce consumption. But what about water? Based on his experiences working with industry, Teissier argues that few facilities have a precise picture of their water consumption and how use of the resource is distributed. “Through measurement, they can see what they are spending, what is extraneous and what is wasted, through leakage for example. That provides a basis for thinking about ways to consume more efficiently. Sustainability and profitability are not mutually exclusive. Being efficient saves money.”

Major investments and a slew of changes will be needed to make the transition to a more resource-efficient, low-carbon economy, as Teissier stresses. “We are embarking on a revolution that will be almost on a par with the Industrial Revolution. New businesses, sectors and products are poised to emerge. Think hydrogen, carbon capture, or, in a different vein altogether, the bike sector, which remains underdeveloped in France. Some firms will be forced to adapt, but these challenges will create opportunities. To achieve the transition, investments are needed and may qualify for government support through schemes such as subsidies and tax credits.”

Planning your energy/climate transition will also deliver greater independence and improved resilience. From the farm that invests in a biogas facility to the supermarket that installs solar canopies in its car park, companies have an opportunity to generate local low-carbon energy that is less exposed to crises of all kinds, from pandemics to geopolitical tensions.

Teissier has these words of advice for any business leader thinking about embarking on an energy/climate transition but wondering where to start: “Don’t try to go it alone. Educate yourself. Learn about best practices. It can be very rewarding and helpful to talk to experts and peers as you explore the right solutions for your firm.”

The next step is to conduct a carbon assessment, a process that may be eligible for financial assistance under government schemes (including BPI and Ademe in France). The assessment provides a starting point for the firm to think about its transition. The assessment report will give the company insights into everything that generates emissions, from computers and insurance coverage to production plants and the cars that employees commute to work in.

After that comes measuring and assembling the data. To take action, you need to know where you are starting from and understand your impact on biodiversity, water and energy consumption and waste production. It is straightforward to get started with simple indicators to measure water, energy, compressed air and more, by installing sensors, which are not a very costly outlay. Says Teissier: “Just as in the past companies introduced accounting and HR software, they now need to integrate environmental data collection. However, standard software solutions are not yet available on the market. But just think about the colossal amount of work involved in gathering data and the impact indicators that have to be provided at industrial firms with multiple facilities. These businesses will need to appoint climate transition officers. A new role played by someone with the requisite technical capabilities, these officers who will work hand in hand with CSR managers to gather data and think about the transition.”

Last but not least, to really engage and make a successful energy and climate transition, it is critical to get the workforce on board. Today’s employees expect their companies to stand up and be counted. Organising climate-focused workshops, for example, is a way to raise awareness and send the message that this is a topic that needs to involve the entire organisation.