Leadership

Chief Ecosystem Orchestrator: the new meaning of CEO in the green transformation

CEOs must embrace the transition from brown to green technologies for the sake of their organizations as well as the planet.

CEOs must embrace the transition from brown to green technologies for the sake of their organizations as well as the planet. Image: Shutterstock/Metamorworks

Cenk Alper
Chief Executive Officer, Sabanci Holding
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Leadership

This article is part of: World Economic Forum Annual Meeting
  • The looming climate crisis is forcing many companies to belatedly transform their operations.
  • Businesses who go beyond risk avoidance and embrace the green transformation will thrive, not just survive.
  • It is incumbent on CEOs to organize the collaborative effort needed to save the planet.

The climate crisis stands as one of the most pressing challenges confronting humanity today. The need for a global transformation to mitigate the severe impacts of rising temperatures is undeniable, and businesses must wholeheartedly embrace sustainable practices.

In recent years, "green transformation" has become one of the most frequently used terms in the commercial sector. According to business authors Nick Fry and Peter Killing, there are three phases of transformation:

  • Anticipatory – no sense of urgency, low agreement on the need for change
  • Reactive – moderate sense of urgency, moderate agreement on the need for change
  • Crisis – high sense of urgency, high agreement on the need for change

Presently, many large businesses in major economies find themselves navigating between the Reactive and Crisis modes in the green transformation. As leaders, our primary responsibility should be to instill a high sense of urgency and align everyone with the need for swift change – before we reach an irreversible state of environmental crisis that poses a threat to civilization as we know it.

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Simultaneously, the imperative to mobilize our teams and resources extends beyond mere risk avoidance. We have embarked on an exponential transformation in three pivotal areas shaping the man-made world: energy, materials and digital systems. Businesses keeping pace with this change will not only survive but experience exponential growth, leaving other players who are still resistant to green transformation to be phased out of the economy.

In the energy sector, for example, robust signals are already evident. The International Energy Agency (IEA) has significantly revised its outlook for global solar growth, projecting a capacity of over 4,000 gigawatts (GW) by 2030 and 12,000 GW by 2050, as shown by the red line in the figure below. This represents a 56% increase in 2030 and a 69% increase in 2050 compared to last year's projections.

Projected future solar energy growth.
Projected future solar energy growth. Image: Carbon Brief

IEA statistics indicate that the growth in coal-based steel, cement, and electricity generation capacity reached its highest point in 2003, 2010, and 2012 respectively. Likewise, the worldwide sales of combustion-engine cars, motorbikes and trucks hit their peak in 2017, 2018 and 2019, correspondingly. New additions of gas power plants reached their maximum in 2002, and the sales of gas boilers peaked in 2020. These indicators serve as precursors for the decline in coal, oil and gas usage anticipated later in this decade. It is clear that clean technologies are gradually displacing polluting assets from the economy.

Having said that, the pace of change falls short of meeting the 1.5°C goal or preventing ecosystem collapse. For example, despite the aggressive rollout of renewable energy sources, over 60% of global electricity generated in 2023 is still derived from fossil fuels. The Global Carbon Project estimates a 1.1% rise in carbon dioxide emissions from burning fossil fuels this year, reaching a new peak of 37.5 billion metric tonnes. This slow change is partially attributed to industries resistant to green initiatives.

Emissions reached a new peak of 37.5 billion metric tonnes in 2023.
Emissions reached a new peak of 37.5 billion metric tonnes in 2023. Image: Global Carbon Project

As we approach the year 2050, there's a looming uncertainty regarding our ability to achieve the Paris Agreement Goals and some of the Sustainable Development Goals (SDGs). Alternatively, we might find ourselves grappling with unforeseen side effects of climate-controlling technologies or carbon capture. Authors rightly emphasize the crucial distinction between removing CO2 from the atmosphere and reducing the emitting of CO2. Even the most advocated solutions such as reforestation, a major goal for many countries, has some uncertainties in terms of its potential to remove CO2.

Consequently, signals from both the market and scientific community unmistakably indicate a transition necessitating both decarbonization and the growth of green technologies. It's not an “either/or scenario”; these imperatives run in parallel. Even fossil fuel-dependent economies are cognizant of the shifting tide. While there has been some attempt to shift the focus from decarbonization of existing assets to capacity additions on green infrastructure, evidenced at COP28 under the UAE's leadership, all economies recognize the penalization of brown investments.

Just as humanity is responsible for the current challenges, it can also produce lasting solutions. Some view our species as selfish, but I believe our inherent nature tends towards collaboration. This was evident during the Montreal Protocol, which saved the ozone layer. Addressing the climate crisis and preventing nature’s collapse necessitates a fundamental shift in how we've built our civilization — from our values and education to the entire economy. The sluggish pace of action is not solely due to incompetence nor politics, but also stems from the inherent complexity of the problem. Yet change started with the private sector’s strong leadership and action, which built hope for others.

Let's mobilize our surroundings, suppliers, and stakeholders. And let's put aside the CEO hats we've worn until today. For the sake of the world and our businesses, let's take on new roles in our companies as Chief Ecosystem Orchestrators. Let's reassess our existing responsibilities, from this standpoint. Let's focus on exploring ways to leverage the exponential opportunities presented by the green economy and gradually transition away from brown technologies before they become obsolete.

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How is the World Economic Forum facilitating the transition to clean energy?

As the Chief Ecosystem Orchestrator of Sabancı Holding, I am one of those who is choosing this path. This is not a call for philanthropy, it’s a call for the enlightened business leadership that is essential for steering a successful company in today's dynamic world.

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Related topics:
LeadershipDavos AgendaEnergy TransitionClimate and Nature
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