March 2020 brought grim news. The COVID-19 virus would shortly be the source of a pandemic. Six months later, the virus had killed a million people worldwide. Less than four months later, that number had doubled.
But then something positive happened. Less than a year after the pandemic’s onset, vaccines appeared. At first the effect was imperceptible. The death toll hit 3 million in early April 2021, and 4 million in early July. But then, as more and more of the population received vaccinations, the death rate slowed. The 5 millionth death was not recorded until late October 2021, and the 6 millionth not until the end of February 2022. The 7 millionth has not yet occurred. While vaccines were not the only factor acting on death rates, they clearly were a critical one.
Prior to this decade, developing a new vaccine normally took up to10 years. Two factors account for the radical shortening of the timeline for COVID-19. The one that has stolen the spotlight is the extraordinary record of advances in genomics over the last 25 years. The one that has received less attention is an unprecedented level of cross-party collaboration. But its role was arguably no less critical.
A sprawling roster of companies, universities, research institutions, and government agencies found indispensable synergies in working together toward a common lifesaving goal. A 2021 study found that “nearly one-third of all vaccine candidates were developed by partnerships, which tended to use next-gen vaccine platforms more than solo efforts.” Collaboration was found to be “essential to the medical and technological fight against COVID-19,” and this includes the sharing of knowledge and technological expertise and the transfer of materials, technical infrastructure, and intellectual property rights.
If there is a crisis looming in the world today that is even bigger than the pandemic of 2020, it is climate change. In fact, the pandemic pales when all of the forms of death and disruption that will be unleashed by climate change are considered.
Additionally, such collaborations create significant business strategy opportunities for companies in industries where energy plays an important role. In this light, it behooves the companies in these niches and industries to take account of the collective-action movement and build their own strategies accordingly.
Collective initiatives that represent fertile ground for strategy development include value-chain combinations that rapidly create markets of critical mass, whereby membership in the value chain can allow members to build a significant lead in the race to achieve superior scale.
Regional combinations, on the other hand, can give rise to cross-industry clusters and thereby create advantage by facilitating infrastructure investment as well as building strong inter-company connections. Being part of something like a standards-setting group creates advantages for members compared to outsiders (non-members). Plus, proactively adopting industry standards can lead industry groups to preempt and avoid regulatory action.
COLLECTIVES IN ACTION
To help illustrate all the above, let’s concretely analyze a case study in more detail. A great example of a value-chain combination is the wind-oriented “Green Fuels for Denmark” project, “which aims to produce large quantities of sustainable green fuels for road, maritime and air transport in the Copenhagen area.”
In July 2022, the project was recognized by the European Commission as an “Important Project of Common European Interest (IPCEI),” as its scale up is part and parcel of the vision for a greener and energy-independent Europe. As such, it is an incredibly ambitious project spanning several sectors, as well as a fantastic illustration of how different companies and institutions can come together along a specific value chain in order to reach one common goal.
Participants in the Green Fuels for Denmark project include fuel-technology company Haldor Topsoe, renewable electricity generator Ørsted, electrolyzer manufacturer Nel, fuel producer Everfuel, fuel expediter DSV, fueling hub Copenhagen Airports, and fueling consumers A.P. Moller–Maersk, SAS, and DFDS. Climate-driven partnerships such as the this count both unmeasurable strategic potential and the kind of success rate that cannot be understated: The project is on track to fulfill the Danish government’s goal of 100% green domestic aviation by 2030, a staggering three years ahead of schedule.
Other examples, such as the Net Zero Technology Centre, see different companies with the same objective successfully embrace a wide breadth of technologies from a regional base. On the other hand, partnerships like the Poseidon Principles seek to build climate awareness into the business decisions of critical economic sectors. In all cases, the groups go well beyond traditional company collaborations and industry associations, as exemplified by the overall success of their aims and the fact that such success can be emulated in different industries.
I believe that, among the doom and gloom of the current landscape and the tragic predictions coming out of the latest Intergovernmental Panel on Climate Change (IPCC) report, we need to look to positive examples of companies doing things right more than ever before.
When it comes to combating climate change and creating a sustainable world—our only common goal—the success of these groups, initiatives, and collaborations can have an exponentially greater effect than that of individual environmental, social, and corporate governance initiatives, and that is something we cannot ignore.
We don’t know when that moment will come for the climate crisis, but we must believe that it will sooner rather than later, and we can imagine we’ll look back someday and thank the collaborations and partnerships that got us there.
As UN Secretary General António Guterres said all the way back in 2019, “the climate emergency is a race we are losing, but it is a race we can win.” And the only way we do that is together.
It’s not easy to find reasons to be optimistic these days––but it’s increasingly crucial to do so.
In the corporate world, in particular, companies are coming together in extraordinary ways to meet the extraordinary challenge of the climate crisis.
These alliances, partnerships, and consortia take many forms, but they have one thing in common: They are a positive beacon of hope against a changing landscape where “business as usual” will no longer cut it. These companies know that the only way forward is to come together in the face of adversity and find unity in our collective efforts to overcome this challenge.
Steve Crolius is President of Carbon-Neutral Consulting LLC, a business strategy firm that provides counsel to companies faced with opportunities and challenges driven by the energy transition.