The Role of Strategic Advocacy in Achieving Decarbonization Goals
Key Takeaways on Current State of Decarbonization
- A Top Priority with Unique Challenges. For companies in hard-to-abate industries – like shipping and logistics, construction, and chemicals – decarbonizing operations is a top priority, but one that brings challenges not experienced by other sectors.
- Cohesive and Consistent Government Intervention Needed. Coherent policy frameworks and government intervention are required for companies to reach their decarbonization targets while remaining economically competitive. This includes ensuring well-intentioned legislation doesn’t create barriers for companies as they work to decarbonize. It also includes funding for research and development to support breakthrough technologies and processes, subsidies to support the scale up of alternative fuels, cross-border mechanisms to protect against the import of less expensive but more carbon intensive materials, and ongoing revisions to federal, state, and local regulations to ensure they facilitate progress, rather than impede it.
- Policies Enacted to Address Energy Transition Barriers. The recent enactment of landmark policies like the Bipartisan Infrastructure Law and Inflation Reduction Act has sought to address some of the barriers to decarbonization, primarily through market incentives and government subsidies to produce alternative fuels such as clean hydrogen (e.g., the U.S. Department of Energy’s Clean Hydrogen Hubs Program) and further develop critical technologies such as Carbon Capture Use and Storage.[1], [2], [3], [4]
- Comprehensive Strategic Advocacy is a Must. Companies committed to decarbonization must develop comprehensive strategic advocacy programs that closely align with their decarbonization roadmaps and include specific objectives with clear and measurable execution plans. At the same time, they must also advocate for the new policies and government interventions that will allow and, in some cases better enable, decarbonization. These efforts should involve strong functional collaboration across the business – from operations and sustainability offices to government affairs, communications, and corporate development.
Key Considerations for Strategic Advocacy
Strategic advocacy programs are necessary to help companies optimize decarbonization investments, position themselves for success, and positively influence the policy and regulatory process at the federal, state, and local levels. The below considerations can serve as a guide for companies looking to build and execute such programs to support industrial decarbonization.
Regulatory and Policy Assessment
The best decisions are rooted in data. In this case, the data is a detailed understanding of the policy and regulatory landscape, the potential impact of this landscape on decarbonization objectives, and changes that must be made to policies or regulations to facilitate industrial decarbonization efforts. For example, for high-heat intensive industries, companies may need to switch to alternative fuels, which may require specific permits from regulatory agencies. Attaining a clear understanding of the regulatory environment in which your company is operating is a critical first step in developing an effective strategic advocacy program rooted in data.
Government Incentives Audit
Beyond understanding the regulatory and policy environment, companies must also comprehend the government incentives available to them. As such, companies should conduct a detailed government incentives audit that includes, but is not limited to: (1) identifying direct funding opportunities for decarbonization projects across federal, state, and local governments; (2) assessing eligibility requirements for relevant government incentives programs; (3) determining indirect funding opportunities that customers may be eligible for and could therefore unlock additional sales opportunities; and (4) aligning on a clear action plan to pursue priority funding opportunities, which are often highly competitive.
Strategic Advocacy Roadmap
Following the completion of steps 1 and 2, companies should compile all data into a strategic advocacy roadmap that identifies: (1) clear goals and objectives; (2) policy and regulatory priorities that can support your company’s ability to achieve decarbonization objectives; (3) a specific plan of action for each policy and regulatory priority; and (4) a list of key stakeholders who could impact the advocacy process – generally categorized into one of three categories: decisionmakers, influencers, and detractors. This roadmap can be immensely helpful in determining how to prioritize diverse advocacy opportunities across a multi-year process, while also measuring progress and ensuring your company remains on track.
Partnership Strategy
As your company begins executing its strategic advocacy roadmap, it is important to “divide and conquer” policy and regulatory objectives. While your company may be best positioned to lead on advocacy for certain policy objectives, other partners such as trade organizations, issue advocacy organizations, or customers/suppliers may be better suited to take a prominent leadership role around other priority issues – particularly if those issues impact multiple stakeholders and industries. For example, on a big issue such as a carbon border adjustment tax, companies would likely benefit most from advocacy by their trade organizations (e.g., Portland Cement Association, Steel Manufacturers Association, etc.) or issues advocacy organizations as opposed taking a go-it-alone approach.
FTI Consulting is well positioned to partner with firms in hard-to-abate sectors across all of these areas, and has a track record of helping clients make concrete progress on their decarbonization ambitions. We’ve done this by developing and delivering multi-stage advocacy programs that include the following elements:
- Clear program goals that are strategically aligned with clients’ overarching corporate and operational objectives, and routinely evaluated and updated in client strategy sessions
- Efforts to position clients as industry leaders in sustainability and educate key stakeholders in government and industry about their decarbonization roadmaps
- Thorough stakeholder maps and engagement strategies that enable us to identify, understand, align with, and mobilize influencers from environmental organizations, academic institutions, industry associations, and local constituencies that can play an important role in advocating for change
- Compelling, stakeholder-specific messages with clear policy and market “asks” and action items that facilitate effective stakeholder outreach
- Strategic advocacy on issues ranging from permitting processes to sector-specific topics of interest
- Ongoing efforts to capture, distill, and share market and policy intelligence with clients
Through these efforts, we have been able to drive the successful introduction of key legislation that supports our clients’ decarbonization goals, boost their reputation among key decisionmakers in the market and in government, and keep our clients steps ahead of relevant developments in the business and regulatory circles.
We’d like to share our experience with you. Let’s work together.
Related Expertise
[1] “A Guidebook to the Bipartisan Infrastructure Law,” The White House (May 2022), https://www.whitehouse.gov/build/guidebook/#:~:text=The%20Bipartisan%20Infrastructure%20Law%20makes,%2C%20energy%2C%20and%20the%20environment
[2] “Inflation Reduction Act Guidebook,” The White House (January 2023), https://www.whitehouse.gov/cleanenergy/inflation-reduction-act-guidebook/
[3] “Regional Clean Hydrogen Hubs,” Department of Energy Office of Clean Energy Demonstrations (last accessed April 19, 2024), https://www.energy.gov/oced/regional-clean-hydrogen-hubs-0
[4] “Carbon Capture, Utilization & Storage,” Department of Energy (last accessed April 19, 2024), https://www.energy.gov/carbon-capture-utilization-storage#:~:text=Carbon%20capture%2C%20utilization%20and%20storage,will%20not%20enter%20the%20atmosphere
The views expressed in this article are those of the author(s) and not necessarily the views of FTI Consulting, its management, its subsidiaries, its affiliates, or its other professionals.
©2024 FTI Consulting, Inc. All rights reserved. www.fticonsulting.com
