Forget the Eiffel Tower or St Mark’s Square. When he visits Europe, Putu Yudha (MBA, 2009), Chief Marketing Officer at Indonesian electric bike manufacturer ALVA, wants to see… charging points for his electric motorcycle. “I call it ‘charging anxiety’,” he says.

And the fact that he’s even got this worry is just one of the reasons why businesses aren’t decarbonising as fast as they could. Lack of infrastructure, complexity, regulation (either too much or not enough) and risk all play a part. So how do you drive this crucial change forward?

Right first time

A key question to ask before you start, says Dr Emilio Marti, Associate Professor at the Department of Business-Society Management at RSM, is whether you’re actually doing the right thing. “Our research has shown a huge implementation gap when it comes to sustainability,” he says. “One explanation is greenwashing, but we argue that there is a second explanation, which is that companies are doing things – but these are the wrong things so they don’t have the right effect.”

Marti and his co-authors analysed the CSR outcomes of four multinationals. They discovered that the two successful companies utilised the expertise of lower-level managers who had on-the-ground experience and an understanding of the local context. The two unsuccessful companies did the opposite. “If they had a rigid top-down approach with one set of CSR practices throughout the company, it didn’t work,” he explains.

Local heroes

After all, you might have good intentions – but if there’s a conflict between local knowledge and centralised authority, you’re unlikely to get very far. Dr Sylke Jellema (PhD, 2024), who examined this conflict in her PhD at RSM, lives the reality of it every day. She recently moved from The Netherlands to Lagos – and as she discusses her research with Think.Do., beeping can be heard in the background of the Zoom call.

“This happens on a daily basis,” she explains. “It means we lost the grid and a generator has taken over. Lagos has a population of 17 million, and the grid is not strong enough to cope. I found with my research that it’s not that people don’t want a greener world that doesn’t rely on fossil fuels. But switching to solar is a risk and it is expensive. There are so many other things that take priority such as food, shelter and economic security.”

Wider views

Indeed, there are no easy answers. Perhaps you’re a company attempting decarbonisation through your own processes and infrastructure. In Europe, responsibility for maintaining energy supplies amid this change falls to companies like E.ON, where Nils Scheller (MBA, 2004) is Vice President, Energy Networks Digital & IT.

E.ON has 47 million customers in Germany, Sweden, Czech Republic, Hungary, Romania, Poland, Slovakia and Turkey, and Scheller explains that moving such a huge number of people to renewable energy requires efficient distribution networks. “Without energy distribution infrastructure, photovoltaics and wind turbines cannot feed renewable electricity into the grid, electric cars cannot be charged and heat pumps cannot provide heating,” he explains.

Scheller points to two key challenges. “First, to master scale and complexity we must standardise, digitise and automate processes, and build smart grids. Second, the regulatory landscape must give us room to allow for funding of massive investment in the expansion of the grid. What we must not forget are securities of supply. It is crucial to ensure that everyone can rely on uninterrupted services, avoiding disruptions like those recently experienced in Spain and Portugal.”

Nudge theory

Or perhaps you’re a company aiming to nudge consumers into decarbonising. In Indonesia, Yudha identifies specific challenges facing EVs in Southeast Asia. ALVA sold thousands of electric scooters in 2024 – but another six million combustion engine scooters were sold as well. So, although the Indonesian government has pledged to convert 10 per cent of scooters to EVs by 2030, there’s still a long way to go. “People ask why,” says Yudha. “Why are people not switching when the cost of ownership, use and maintenance of EVs is much lower?”

Fear of running out, of course, is a big problem, with customers worried about being unable to charge their vehicle, even though the bike has a range of up to 100km and most trips are under 50km. ALVA can combat this by installing charging points, leading to a second challenge – what connection to use when there is no standardisation? A third issue arises when customers try to pay for the vehicle. “Most vehicles in Indonesia are leased, and financial institutions don’t have the data for EVs to understand what their value will be in two or three years,” says Yudha. “That made it hard to persuade banks to finance our customers at first.”

Or perhaps you’re in conflict with the broader economic context. Although Indonesia has decarbonisation targets, the automative industry and its wider supply chain is a huge source of employment – one that the government is reluctant to upset. All the same, ALVA sales are growing steadily, partly because companies are choosing EVs for their company fleets to reduce their own carbon emissions. But progress is slow. “People accept there’s a problem with the climate but cannot risk moving too fast,” he says. “How do countries or companies hit targets? It’s a mix. The Indonesian government is saying 10 per cent by 2030. That is a baby step but it’s still a step. You have to take that first step.”

New models

What might that first step be? There’s no single answer, says Steve Kennedy, Associate Professor of Business Sustainability at RSM. But an obvious point is that many companies are reliant on a business model of endless throughput growth. Firms are commonly focused on tackling the carbon emissions per unit of production, but gains are being eaten away by growth in sales of products – meaning absolute emissions may remain relatively unchanged.

Is there an alternative? Voluntary degrowth, suggests Kennedy, where a business radically shifts its model to reject repeat consumption and planned obsolescence of its products. Patagonia, the outdoor clothing company, is a perfect example. “They say: don’t buy this coat if you don’t need it. And if you do need it and you do buy it, it’ll be with you for life. If it needs mending, we’ll repair it for you.”

Of course, Kennedy points out that Patagonia’s premium products lend themselves perfectly to this mindset: it also may only work for a certain section of consumers. “But there are other models which look at selling functionality, rather than transferring ownership, so that many customers can use the same product. For example, the Netherlands has Swapfiets, the bike company which allows you to use a bike for a monthly fee. That incentivises the company to make products that last and get maximum value from materials before they technically dissipate. There are many companies now which are trying to move away from traditional business models.”

Changing your business model is also incredibly risky and causes understandable nervousness. Say you have an automotive company with 200 mechanical engineers whose skillset lies in building combustion engines: what will happen to their jobs if you decide to pivot towards electric? If you shift to sufficiency or degrowth business models and manufacture fewer products, what will happen to your factory workers? Changemakers need to have a big vision, says Kennedy, but they also have to remember that any transition must be fair and just.

“For example, you might need to experiment and test in a radical innovation business unit, separate from your core business, to develop new competencies,” he says. “That way, you can shield transformative ideas from risk-adverse structures. And, once those ideas are mature, you could experiment in a low-risk environment with receptive conditions. The Netherlands, for example, has great infrastructure already in place for electric vehicles, reducing barriers that exist in other markets for an electric vehicle manufacturer. New business models can then be phased into the company’s core with a focus on retraining and upskilling employees.”

Future thinking

Marti sees other signs for optimism. While asset managers and shareholders might be shying away from pressurising companies to decarbonise, the asset owners themselves – pension funds, insurance companies and foundations – are driven by a different logic.

“They are thinking long term and are looking to ensure a good pension in a liveable world,” he says. “That is very relevant to countries like the Netherlands which face rising sea levels. I hope the asset owners step up and force the asset managers to address these things irrespective of the short term, because in the long term it is essential. I still believe things will be resolved as people see the consequences of climate change. That’s my biggest hope.”