Executive Summary
This white paper synthesises insights from a corporate roundtable discussion focused on the challenges and solutions in scaling cleantech deployment for corporate decarbonisation. The findings indicate that while there is strong corporate interest in cleantech adoption, significant barriers exist in risk management, procurement processes, and the alignment of corporate and innovator expectations.
Primary challenges include warranty and liability concerns, regulatory uncertainty, scale-up difficulties, and the complexity of stakeholder management. However, participants identified several promising approaches to overcome these barriers, including innovative partnership models, controlled testing environments, and modified procurement processes.
The discussions revealed that successful cleantech deployment requires a delicate balance between corporate risk management and innovator agility, supported by clear communication channels and appropriate scaling mechanisms.
Conducted under Chatham House rules the corporates present represented major global players in the automotive, bioscience, cement, pharma, construction, and banking. Participants were drawn from roles that have a specific decarbonization remit.
Introduction
As large businesses face increasing pressure to decarbonise their products, operations and supply chain, the successful deployment of cleantech solutions has become crucial. However, the path from innovation to large-scale implementation is complex and fraught with challenges. Drawing from real-world corporate experiences, this paper examines the critical barriers to cleantech adoption and explores practical solutions that have emerged from industry leaders.
Key Challenges and Risks
1. Risk Management and Liability
Companies across sectors consistently identify warranty and liability concerns as primary barriers to cleantech adoption. Large corporations must carefully manage the risks associated with unproven technologies, particularly in regulated industries like automotive and energy. The warranty liability issue is especially pronounced at scale up in sectors where technology failure, such as wind turbine operations or automotive applications, could have significant consequences. This challenge is compounded by the frequent misalignment between innovators’ risk tolerance and corporate requirements for proven reliability.
2. Volume and Reliability at Scale
A recurring theme throughout the discussions was the persistent gap between innovation readiness and corporate requirements. While many cleantech solutions show promise at a small scale, they often struggle to meet large corporations’ volume and reliability demands. This “scale-up gap” is particularly challenging in capital-intensive industries requiring significant infrastructure investment. Many participants noted that finding the right solution is often possible, but achieving the necessary scale remains a significant hurdle.
3. Engaging Procurement and Internal Processes
Traditional procurement processes have emerged as a significant barrier to the adoption of cleantech innovation. Whilst these systems are designed to manage risk and ensure standardisation, they often need to be more flexible to accommodate the unique characteristics of cleantech solutions. Many participants acknowledged that whilst procurement isn’t necessarily the right channel for initial innovation adoption, alternative mechanisms within larger companies often need to be improved.
4. Regulatory Uncertainty
Companies expressed significant concern about regulatory uncertainty and lack of standardisation. This creates hesitation in investment decisions, as corporations fear backing technologies that might fall outside future regulatory frameworks. The energy storage sector, in particular, highlighted challenges with varying market governance structures. This uncertainty affects direct technology adoption and influences decisions about partnership structures and risk allocation.
5. Stakeholder Alignment
The successful deployment of cleantech solutions often requires coordination among multiple stakeholders, including tier 1 suppliers, innovators, and corporate departments. Managing these relationships and ensuring aligned interests presents a significant challenge. The complexity increases when considering international markets and varying regulatory environments.
Innovative Solutions and Best Practices
1. Modified Partnership Models
Several companies have developed innovative approaches to partnerships that show promising results. These include creating controlled testing environments or “application centres” where innovators can test their technology in a managed setting. Some organisations have developed intermediate-scale facilities to bridge the gap between laboratory and full-scale implementation. Additionally, benefit-sharing pricing models have emerged as a way to align incentives and reduce upfront costs whilst managing risk.
2. Risk Management Strategies
Successful risk management approaches have evolved beyond traditional methods. Organisations increasingly focus on engaging more experienced startups with seasoned board members. Detailed, specific communication strategies have replaced abstract discussions, leading to more precise expectations and better outcomes. Many companies have built active innovation assessment teams within their organisations, creating clear entry points and information channels for innovators.
3. Procurement Innovation
Organisations are developing alternative pathways to traditional procurement that better accommodate innovation. Some have created special innovation channels separate from standard procurement processes. Others have implemented “challenge calls” to identify and develop promising technologies. A key focus has been streamlining the timeframe between initial contact and implementation, recognising that traditional procurement timelines often conflict with innovator needs.
4. Industry Collaboration
Cross-industry collaboration has emerged as a crucial element in successful cleantech adoption. Companies are increasingly sharing testing results across markets and regions, working together to create industry standards for new technologies, and building shared testing facilities. This collaborative approach helps distribute risk and accelerate the validation of new technologies.
Areas of Consensus and Divergence
The roundtable discussions revealed several areas of solid consensus amongst participants. There was universal agreement that traditional procurement processes are inadequate for cleantech adoption and that scale-up challenges represent a significant barrier. Participants also agreed that clear communication and specific requirements are essential for successful partnerships and that risk management must be balanced against innovation potential.
However, several areas of divergence emerged. Participants held varying views on the role of tier 1 suppliers in innovation adoption, with some seeing them as essential intermediaries and others preferring direct relationships with innovators. There were also differing approaches to procurement reform and varying perspectives on the value and implementation of carbon pricing in decision-making.
Next Steps
To advance cleantech deployment, key stakeholders should prioritise:
1. Developing standardised risk assessment frameworks
2. Creating industry-wide testing and validation facilities
3. Establishing clear channels for innovation engagement
4. Building support mechanisms for scale-up
5. Where competition allows, sharing best practices and successful approaches across industries
Conclusion
Successfully deploying cleantech solutions requires a careful balance between innovation and risk management. Whilst significant challenges exist, companies are developing innovative approaches to overcome these barriers. Success depends on creating appropriate frameworks for collaboration, developing clear communication channels, and building effective scaling mechanisms.
The path forward requires continuing to evolve corporate processes, improving understanding between innovators and corporations, and developing supportive ecosystem infrastructure. As the pressure for corporate decarbonisation increases, these solutions will become increasingly critical for success.
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