The lack of understanding around green funding is holding decarbonisation back

The surging demand for decarbonisation is powering strong growth for one company but growth could be much faster with more green finance that keeps the funding solution off balance sheet.

According to Skipp Williamson, managing director and founder of Partners in Performance, in the past two years her company has helped over 40 of the top 200 businesses in Australia – and more globally – mitigate more than 50 million tonnes a year of carbon dioxide. That’s roughly equivalent to taking all of Australia’s passenger vehicles off the road for a whole year. 

After leaving McKinsey & Co, engineer Williamson founded the company in 1996 to focus on the heavy industries like mining and metals, oil and gas, and energy and efficiency. 

It’s come a long way since its first client, a Pulp and Paper client in Europe – the company now has more than 650 staff led by 40 directors in 42 countries worldwide. It’s a remote team, so they’ve been working over the phone decades before Slack or Teams were even dreamt of. 

Alongside global giants such as Accenture, Stantec, Deloitte, KPMG, and King & Wood Mallesons, the global management consultancy was recently recognised at the top of the annual AFR BOSS Most Innovative Companies list, which celebrates Australian businesses championing innovation.

The company works across a range of sectors – from large emitters in mining and industrial, to manufacturing, banks and large retailers. 

“We are globally very focused on the top emitters in each country. Our journey is about actually getting carbon out of the atmosphere, so we help companies work out their roadmaps and then move them towards funding and implementing,” Williamson told The Fifth Estate. 

With 15 per cent growth year-on-year across the board, the company is not slowing down yet. The energy transition, she says, is being led by WA with the heavy industrial sector ahead of other sectors. 

“Western Australia is slightly further ahead of the East Coast – but the East Coast is waking up to the higher prices they’re now seeing.” 

Legislation provides clarity

In energy transition, Williamson says Australia is in some ways ahead of the curve – the US is only now starting to wake up, with the introduction of the Inflation Reduction Act.

Opportunities are not just in decarbonisation – which is a cost reduction – but whole new industries being created as a result.” 

The US Democrats Inflation Reduction Act of 2022 and new proposal for the 2022 financial year Budget Reconciliation bill will invest about  $300 billion in deficit reduction and $369 billion in energy security and climate change programs over the next 10 years.

In Australia, there’s the Albanese Government’s landmark Climate Change Bill that will ensure Australia’s emissions reduction target of 43 per cent and net zero emissions by 2050.

Williamson says the bill is useful for corporates to have more clarity and certainty around meeting emissions targets.

“There’s still a shortage of people who know this space well. Corporates who engaged earlier are now starting to see the opportunities. 

“Opportunities are not just in decarbonisation – which is a cost reduction – but whole new industries being created as a result.” 

Lack of understanding around green funding

The company’s Energy Transition Roadmap has three phases: assessing a decarbonisation pathway tailored to the client, ensuring the pathway is economic and thus easy to justify, and then helping the client obtain green funding – which allows for off–balance sheet funding and is cheaper than normal funding.

Green funding is a difficult space – and one that she says many don’t know how to get into. There’s a lack of understanding, and it’s difficult for companies to demonstrate they are green enough to be eligible for funding. 

Green financing, according to the UN Environment Programme, has increased financial flows into sustainable development priorities. 

This funding helps companies and organisations to better manage environmental and social risks, take advantage of opportunities and deliver greater accountability.

Being eligible for green funding brings other benefits. Like funding off-balance sheet, which means funding doesn’t impact financial liabilities that would negatively impact a company’s credit standing, making it ideal for both public and private sector companies with limited financial resources. 

This means they are able to reduce the amount of capital they have to put up for a project – they are able to enjoy more financial flexibility and access cheaper borrowing. 

The main message is this: “It’s not that companies don’t want to spend a lot of money. But if you come up with more economic solutions, they can do it much faster. Time is what matters here – the faster we can get this done, the more [decarbonisation projects] they are able to do,” Williamson  says. 

Cutting labour costs in the midst of a “staggering skills shortage”

The roadmap also includes solutions to take labour costs out of implementation. 

Australia is suffering a “staggering” skills deficit, with labour shortages doubling in 2022, according to a new National Skills Commission report released this month. 

Job vacancies in August reached 309,000. Nearly a third of all sectors are confronting serious worker shortfalls, and the number of occupations struggling to fill positions jumped from 153 to 286 this year. 

By making energy systems easier to install and cutting down on labour, Williamson says the cost of installing solar arrays can be cut by 50 per cent, and the cost of installing a wind turbine can be cut by 20 per cent. 

“Every client has a slightly different problem, so we create solutions for that client.

“It’s more than a roadmap, it’s the end-to-end transformation of a company’s greenhouse gases footprint. We have an energy transition practice in the firm… In this space for 20 years. We have specialists in all different areas, and we work closely with big suppliers of each renewable element.” 

Williamson says the company’s priority is now to expand in the energy transition space. In one recent case study, the company was able to reduce energy usage by a smelter company by 50-75 per cent.

The goal is to provide solutions that make transition economic, bring company’s green funding off balance sheets, and get the solutions in place to transition at speed. 

“The time is now, the planet needs this work now. 

“The corporates are certainly moving at pace in this space.” 

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