Reaching net zero carbon emissions by 2050 will be a considerable challenge. Every organisation in every sector has a critical role to play in limiting global warming. Commitment to this agenda must be top of mind for all companies – public and private, large and small – and to succeed they must undergo major transformation. The private sector can move the needle significantly on net zero. To find out where companies (multinationals and large domestic corporates) are in their net-zero transition, we spoke to investors and global senior executives, from both carbon-intensive and less carbon-intensive industries.4 The responses reveal that:
Companies are moving too slowly: 55 per cent of companies say they are not transitioning fast enough and 78 per cent of investors say most business leaders are failing to take the action needed to transition their company by 2050.
Their progress is being hampered by a lack of finance: this is the greatest barrier to net-zero transition according to both senior executives and investors. And the need for finance is great: some 85 per cent of companies require medium or high levels of investment to transition to net zero, rising to 91 per cent of carbon-intensive companies.
Carbon-intensive industries and emerging markets are struggling most: both companies and investors believe that significantly more investment is being directed at developed markets than emerging markets, and that carbon-intensive sectors in emerging markets will experience the most significant capital shortfall.
Net zero is not seen as commercially viable: 64 per cent of senior executives believe the economics of operating as a net-zero organisation do not stack up for their company.
Key actions would speed up transition: a majority of companies believe that a standardised global measurement and disclosure framework would help them move faster – as would more evidence of cost savings, pressure from supply chain partners and investors, and an effective global carbon tax.
4 The carbon-intensive companies included in this study were from the following sectors: energy, oil and gas; metals and mining; transport and logistics; and infrastructure
