The world must decarbonise, but how quickly does each company need to? That’s the part that has left many of us scratching our heads. What if we could signpost the future to predict the rate at which we should #decarbonise? How can scenario planning with signposting turn us into predictors of possible futures rather than solvers of the past?

1. What if…
we could signpost the roadmap
to Net Zero?

2. SHIFTING SANDS
The world must decarbonise – that we know. But how quickly does each company need to and what is the
roadmap to get there?The uncertain future of decarbonisation comes down to a range of factors, including:
// Intergovernmental alignments
// Energy economics
// Technical innovations
// Critical mineral supply
// Stakeholder pressures
Then we must also factor in:
// Transition risks e.g., reputation, market & product, regulatory, technology
// Physical risks e.g., natural disasters, drying climate, temperature rises etc.
// Availability of metals and minerals and mining capacity for the new decarbonised economy

3. WHAT ARE THE CURRENT APPROACHES?
There is no single methodology to manage uncertainties. Uncertainties are interrelated
and interdependent in ways that are almost unpredictable. And local events can cause
ripples that expand globally.
E.g. The war in Ukraine is inflating gas and oil prices. High gas and
oil prices result in increased interest in electric vehicles and
cost of consumables going up due to higher transport and
energy costs.
Traditional forecasting simply doesn’t cut it.
What does this mean for forecasting the ‘how’
and the ‘when’ for decarbonising?

4. SCENARIO PLANNING AND SIGNPOSTING
To gain insights into the importance of these uncertainties, new modelling approaches
can be developed.
Scenario planning with a wide range of possible operational, financial and social
outcomes, and a system of “signposting” the scenarios to see which one is more
likely to unfold. Signposts are a way of helping us get to a destination. They tell
us a path to take when we hit a particular fork in the road. Scenario planning
combined with signposts can create higher levels of confidence in an uncertain
environment. Consider an example that uses the uptake of elective vehicles (EVs).

5. Let’s say at the moment we have 5% EVs on the road and 95% regular, internal
combustion vehicles. At some point in time in the future, we are likely to have 100%
electric autonomous vehicles on the road. That may be 10, 20 or 30 years away.
Lets call that Time 0.
So how might we get an idea of when this will be? If we mapped out signposts, such as
the manufacturing capacity of EVs by key car companies, then this is likely to give us an
indication of the rate of decarbonisation of the vehicle fleet.
For us in the mining industry, this could be a good
indicator for predicting future volume demand for Lithium.
And so, we can go on…

6. WHY SCENARIO PLANNING AND NOT
FORECASTING?
A forecast is a prediction; we’re saying what we think will happen.
A scenario is different… it generally looks much further out
and is trying to build a picture of the future in extreme uncertainty.
– Seb Henbest

7. WHAT ARE THE CURRENT APPROACHES?
// Businesses will need a clear path and agenda to decarbonise their operations.
// Scenarios with signposts should be used to help us navigate this.
// Understand this is not business as usual and adapting
thinking and planning to accommodate this.
// Be agile enough to shift strategy as events develop.
// Seeing and acting on inflection points.

8. The road to net-zero emissions is filled with uncertainties. We don’t have a crystal ball
that will tell us how economic conditions will change, how society will adapt to necessary
behavioural changes, how technologies will evolve and which government policies will be
most effective.
However, with scenario planning and signposting
we can gain some predictability on the unpredictable.
Choosing the right partner, with the right skills,
for this journey will be key in reaching net-zero.

9. CONTRIBUTORS AND SOURCES
1 Prof Rita McGrath (2019)
Seeing Around Corners: How to Spot Inflection Points in Business Before They Happen
2 Clayton Christensen, Erik A Roth, Scott D Anthony (2004)
Seeing What’s Next: Using Theories of Innovation to Predict Industry Change
John McGuire, DRA Chief Innovation Officer
Dave Collins, DRA Decarbonisation Advisor
Les Wood, Business Development Executive, Advisory