Why is efficiency improvement important?

“Organizations should pursue indirect carbon reduction by optimizing processes, upgrading equipment, and enhancing risk management—while meeting market demands and environmental standards. In response to the EU’s carbon border adjustment mechanism (CBAM), Chinese organizations going global must prioritize compliance, technology sophistication, talent development, and ESG performance.”

—— Ian Xie

dss⁺ is a global consulting firm focused on helping organizations improve efficiency, reduce costs, and achieve sustainability goals through operational management expertise. It has been operating in China for 22 years, entering the market in 2003. dss⁺ recently launched its Chinese brand name “顶世智汇” (Ding Shi Zhi Hui) as part of its long-term commitment to the Chinese market.

Carbon reduction : Start from addressing core operational challenges

"Many manufacturers are not necessarily aiming for carbon reduction as their immediate goal when pursuing green and low-carbon transformation. Their primary objective is often to improve operational efficiency," said Ian Xie, China Managing Director of dss⁺, in an interview with 21st Century Business. "However, efforts to enhance efficiency ultimately contribute to decarbonization: improved productivity reduces resource consumption, better risk management lowers the likelihood of accidental emissions, and developing eco-friendly products align more closely with market demands."

According to Ian, carbon reduction can be pursued through a carbon-centric strategy, but it can also be effectively achieved by focusing on core operational challenges and delivering practical solutions that drive real emissions reductions.

According to Ian, the core objective of green transformation is to conserve energy and reduce carbon emissions. This overarching goal can be further distilled into two key dimensions: low-carbon production and innovation in business models. For traditional industries, the priority lies in decarbonizing the production process—through energy-efficient technology upgrades, clean energy substitution, process reconstruction, and the implementation of circular economy practices.

“In the Chinese market, our current approach to carbon reduction is through helping chemical companies improve production efficiency,” Ian explains. On one hand, this involves risk management, such as preventing fires, explosions, and leaks—incidents that are directly linked to carbon emissions. On the other hand, it's about enhancing production efficiency—for example, optimizing production processes to reduce energy intensity while increasing output.

From a product perspective, the use of green raw materials is another strategy for low-carbon transformation. According to Ian, companies that develop new eco-friendly products—such as bio-based materials—can gain first-mover advantages and expand market share, while naturally achieving carbon reduction goals. “When a product inherently offers environmental benefits, carbon reduction becomes an inevitable outcome of market competition,” he says.

Outward-bound organizations must embrace a long-term mindset

For Chinese organizations, green and low-carbon development is not only a requirement of the national "dual carbon" goals—it is also a critical challenge when expanding overseas.

By 2026, the European Union’s Carbon Border Adjustment Mechanism (CBAM) will enter its enforcement phase. Exporters in six high-emission sectors—steel, aluminum, cement, fertilizers, electricity, and hydrogen—will face tariffs of up to €600 per ton if they cannot provide zero-carbon certification for their products.

Xie believes the core challenge for Chinese organizations going global is how to integrate into local business environments. This involves navigating multiple layers of complexity, including regulatory frameworks, cultural differences, market competition, compliance standards, and talent management.

Ian has observed that Chinese organizations currently face two primary challenges in their international expansion. The first is profitability—many companies have secured business licenses and launched operations, but financial performance often falls short of expectations. The second relates to ESG concerns—overseas enterprises need to recruit a significant number of local employees and align operations with the local culture.

“These issues often stem from a short-term interest-driven mindset,” Ian shared. “Some companies take a risky approach of ‘expand first, regulate later.’ Instead, Chinese companies must embrace long-term thinking—developing their operational quality and sustainability capabilities in tandem throughout the globalization process.”