Majority of Global Companies Fail to Match Net Zero Ambitions with Action, Accenture Warns Ahead of COP28
In light of the upcoming 28th UN Climate Change Conference of the Parties (COP28), a new study from Accenture reveals a stark reality: less than 20 percent of companies are on course to achieve net zero carbon emissions by 2050. This news comes at a time when over a third of businesses express their inability to further invest in decarbonisation due to the current economic climate.
Accenture's research, which involved an extensive analysis of the 2,000 largest companies worldwide along with a survey of over 1,000 executives across 14 industries in 16 countries, offers a sobering insight into the near-term challenges of industrial decarbonisation. With heavy industries such as steel, metals and mining, cement, chemicals, and freight and logistics responsible for 40 percent of global CO2 emissions, the study underscores the importance of reinventing decarbonisation strategies to break the economic deadlock.
Despite the slow progress, there is a silver lining: the number of companies committing to net zero has increased to 37 percent, up from 34 percent in the previous year. Yet, this optimism is cautious, as nearly half of these companies have seen their emissions rise since 2016. Only a third are reducing emissions but not at a pace to meet the 2050 net zero goal.
Jean-Marc Ollagnier, Accenture's CEO for Europe, Middle East and Africa, emphasises the opportunity for organizations to align business growth with the net zero imperative. He points out that the journey to net zero is not just an enterprise challenge but an ecosystem-wide dilemma, requiring a solution for the supply-demand disconnect.
Accenture's 'Destination net zero' and 'Powered for change' reports highlight the critical role of heavy industry in achieving global net zero targets. The economics of decarbonization and structural misalignments are key obstacles to progress. To overcome these, the report suggests:
The necessity for affordable, low-carbon energy, as 81 percent of industry leaders foresee a two-decade wait for sufficient zero-carbon electricity.
Building confidence in the commercial viability of low-carbon products, with 95 percent of leaders predicting a lengthy period to achieve price parity with high-carbon alternatives.
Addressing cost management concerns, as 40 percent of sector leaders cite the current economic climate as a barrier to further decarbonization investments.
Accenture’s leadership stresses the need for collective action to accelerate net zero targets, highlighting the importance of scaling low-carbon power and hydrogen to secure affordable supply. She also points to the potential of green premiums to finance industrial decarbonization and the reduction of capital and operating expenses related to low carbon infrastructure.
The research methodology involved meticulous scrutiny of public company documentation and emissions data from S&P Global Market Intelligence, Sustainable1. The findings serve as a clarion call for stakeholders globally to unite and forge a new economic framework for decarbonization, providing a solid foundation for the heavy industry to reinvent itself and align with the net zero trajectory.