World Economic Forum’s Net-Zero Industry Tracker 2022 highlights the key challenges for industries
The World Economic Forum has released the first edition of a report on the state of the net-zero transition in key industrial sectors. The Net-Zero Industry Tracker 2022 highlights the need to fully understand the scope and scale of the challenge for these sectors and identifies a significant gap versus the pace of decarbonization necessary to achieve net-zero goals to limit global warming to 1.5C by 2050. The urgency for industrial decarbonization is reinforced by high energy prices and energy supply chain disruptions.
This initiative, launched by the World Economic Forum in collaboration with Accenture, establishes a common, fact-based understanding of the industrial sector’s net-zero transformation enabling cross-industry and multi-stakeholder collaboration. The report introduces a holistic framework for a 360-degree perspective and standard metrics needed to measure progress, as well as key recommendations for industrial firms, policymakers, consumers and other stakeholders.
Progress-tracking and transparency are essential to help industries determine the trajectory of their decarbonization, maintain steady progress, and inform necessary course corrections along the way.
The report points out that over $2 trillion will be required to make low-emission industries a reality and that the first full-scale commercial projects still hold significant risks for companies to invest in. The report underlines that concerted efforts also should include policy-makers, financial institutions and consumers.
The report provides qualitative and quantitative measures to track the evolution of key enabling dimensions such as maturity of technology, access to enabling infrastructure, supporting policy frameworks, demand for low-emission products and availability of capital for investments in low-emission assets. It assesses the state of these enablers, which need to advance simultaneously, and highlights sector-specific accelerators and priorities in five heavy industries – steel, cement, aluminium, ammonia, and oil and gas, which together generate 80 percent of industrial emissions, according to Accenture analysis.
Given the cross-sector nature of barriers and priorities for industrial net-zero transformation, innovative forms of partnership within and across sectors, and with other stakeholders, will be fundamental to addressing the challenge. Other measures include consensus on defining “low-emission” industrial products and processes, robust and stable green demand signals, and risk-sharing mechanisms to attract necessary capital in technology and infrastructure development.
“Companies are at a sustainability inflection point, where embedding sustainability by design deep into their enterprises is no longer an option,” said Kathleen O’Reilly, global lead, Accenture Strategy. “To lead in this moment, companies must focus on multi-stakeholder collaborations — for example, helping customers reshape demand, teaming with industry peers to bring technology costs down and developing shared infrastructures and working with policy-makers on regulations to create differentiated markets for low-emission products.”