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Summary

Arthur D. Little is a global management consultancy with over 135 years of experience in innovation. The PRISM report discusses how businesses can handle the challenges of climate change and sustainability by focusing on four main areas: Anticipate the future trends, innovate, and transform organizations to adapt to climate change. The report argues that while many show enthusiasm for sustainability, limited awareness and high costs are key barriers.

The PRISM issue, focusing on "making sustainability sustainable," covers several themes and contributors. Key topics include climate change adaptation covered by Dr. Albert Meige, lithium battery recycling by Dr. Michaël Kolk and Dr. Philipp Seidel, internal carbon pricing by Pavel Kubička and Martijn Eikelenboom, and in-space energy solutions explored by Arnaud Siraudin and Matteo Ainardi.

Climate Change Adaptation

Climate change is no longer just a mitigation issue but has become a necessity for adaptation. The report highlights four key business functions affected by climate change: sourcing and supply chain management, manufacturing and industrial processes, protecting their industrial assets, and selling goods and services that adapt to climate change. A "projection-based strategy" is emphasized, with the ADL Blue Shift Institute identifying 11 "shaping factors" that currently hinder progress. The report also provides five plausible future scenarios (Green Communities, Lonely at the Top, Wild Green West, Don't Look Up, and Adaptation Surge) that companies should consider when shaping their strategies.

Lithium Battery Recycling and Urban Mining

Despite growing demand, the circular economy for lithium battery recycling is not yet profitable. However, the article outlines a blueprint for a "urban mining" model to successfully recapture values from end-of-life batteries in local, ecologically sound ways. The model developed by ADL comprises parts of a global effort that can be adapted to recycling other materials. The European Union is already presenting a clear regulatory future with stringent Targeting the Energy Service Modelling Across the Disciplines (EMET) proposals. Case examples are provided, such as Li-Cycle and BrunP Recycling, showing how collection, sorting, and efficient recovery can be achieved. The highlight is the growing indium recycling sector in Europe, which could significantly reduce emissions.

Internal Carbon Pricing

To manage emissions and meet net-zero goals, companies should implement internal carbon pricing (ICP) models. Done in a holistic manner with accurate data, expected regulatory changes, and a strong link to business strategy, ICP helps companies manage carbon costs and align financial decisions. The report gives examples such as Swiss Re and Klarna to show how ICP has helped companies take action. It emphasizes the need for clear cost calculations, strong governance, and early implementation.

Sustainable Transport and Fuels

For transportation, the PRISM article highlights the challenges of sustainable transport fuels, such as the lack of available capital, and the need for collaboration between regulators and private investors to create a balanced market. Technologies like lithium batteries and sustainable aviation fuels (SAF) show promise, but financial and regulatory barriers need to be overcome. The report outlines five key challenges, including technological readiness and securing reliable supply chains, to help investors evaluate opportunities.

Innovation in Space for Sustainability

The article discusses Solar Reflecting Mirrors (DSR) in space, which can be deployed to provide direct, on-demand sunlight to solar farms on Earth. The technology, reminiscent of the 1960s, requires a significant investment for scalability, but it offers numerous benefits, notably in reducing carbon emissions by 70% compared to conventional energy sources. DSR is a modular and scalable solution, opening up new opportunities in green hydrogen production. The report argues that success in DSR hinges on cross-sector collaboration, innovative financing models, and co-development of technologies from natural and artificial sources.

Key Takeaways

1. Climate Change Adaptation is integral to obtaining lasting sustainability.
2. Internal carbon pricing is essential to decarbonization and aligning investment decisions.
3. Lithium battery recycling requires profitable and scalable urban mining strategies for long-term viability.
4. Sustainable freight and transport needs new fuels and a combination of regulation and private investment.
5. Innovation in space energy, such as direct solar reflection, could boost economic and environmental resilience, although implementation requires significant collaboration and investment.

Exploration of these areas highlights the need for gritty, real-world understanding and innovative strategies to make sustainability more inclusive and profitable for a broader range of businesses.