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Towards net-zero
As corporate entities embrace their responsibility towards the environment, a growing number are charting ambitious courses towards carbon neutrality. Setting sights on net-zero goals, though formidable, presents a myriad of benefits. It ignites a culture of innovation, providing impetus for companies to reassess their modus operandi, channel resources into eco-friendly technologies, and address their carbon emissions, gaining a competitive edge in the process.
Nevertheless, attaining net-zero targets requires government support, substantial investment, breakthroughs in technology and fundamental shifts in systems – especially when confronting greenhouse gas emissions throughout the supply chain. There is still a gap between ambition and transitioning planning on net zero. 67% of survey respondents confirmed they have made a public commitment to reach net zero before 2050. But just 55% of companies have a plan in place that will be sufficient to get there in line with a 1.5C scenario.
Q. Has your organisation developed a 1.5°C-aligned climate transition plan?
More companies are prioritising tackling Scope 3 emissions
According to PwC, between 65-95% of any one company’s carbon impacts are to be found within its supply chain. This is a big problem. Not only is the Scope 3 footprint large, but it is indirect and outside of the control of a company’s activities and operations. Tracking and reporting Scope 3 is tough enough; reducing supply chain emissions is even more difficult.
It is no surprise then that an increasing number of respondents say they are placing greater importance on addressing supply chain emissions as part of their decarbonisation activity. The issue is now ‘business-critical’ for 22% of businesses, compared with 16% that said the same in the previous edie Sustainable Business Tracker survey.
Supply chain greenhouse gas emissions reduction appears to be especially important to larger companies, with 77% of firms with more than £500m in turnover claiming that addressing Scope 3 is either ‘business critical’ or ‘high priority’. Among this 77%, the majority of representatives work within the construction (18%), retail (15%) or manufacturing (12%) sectors.
One of the biggest hurdles facing companies trying to reduce their value chain emissions is effectively engaging with suppliers. Finding efficient, cost effective and easy ways to get robust data and understanding carbon hotspots in the supply chain is proving particularly problematic, as highlighted by the many comments received last time round.
With more and more companies looking to find solutions for Scope 3 it is no surprise that more respondents see ‘supplier engagement’ as a key micro challenge to their overall sustainability strategy. It has risen to the third most-cited micro challenge, with 10% claiming it to be the No.1 issue. Among this 10%, almost half of the respondents work in either the construction, manufacturing or transport sectors.
Q. How much of a priority is your organisation currently placing on each of the following areas of decarbonisation?
Businesses increasingly untrustworthy about government ambition and support
Ongoing UK Government U-turns on environmental policy, regulation and commitment continue to cause uncertainty for business. Failing to inject money into the low-carbon transition as part of the Spring Budget is further evidence that the Government lacks a plan to support companies on their net-zero journeys.
Political instability remains the biggest macro level challenge for business right now, according to 27% of respondents (more than said the cost-of-living crisis (25%), escalating climate change (19%) or the skills gap (11%)).
However, the lack of new or enhanced environmental regulations coming through is not causing a headache for companies at a micro level. Fewer than 8% of respondents pointed to policy and regulatory changes as the biggest challenge facing their sustainability strategy right now – far fewer than said short term profitability mindset (29%) or lack of funding/investment (23%).
Even more survey respondents now think the Government’s net-zero targets will not be achieved by 2050 (76%, up from 70%) suggesting a growing lack of trust in UK Government. Meanwhile, the majority of people (almost 80%) either ‘strongly disagree’ or ‘disagree’ that the current UK Government already has the policies in place to achieve net-zero by the middle of this century. And a similar percentage believe that we need new political leadership if we are to stand any chance of meeting our net zero goals by 2050. With Britain heading to the polls later this year, the electorate at least has a chance to change the status quo, with most respondents (73%) ‘agreeing’ or ‘strongly agreeing’ that the General Election is a “much needed opportunity to recharge the UK’s net-zero transition.”
Q. Do you believe the current UK Government already has the policies in place to achieve net-zero by 2050?
COP28 wasn’t a big deal
Despite the apparent positive outcomes of the UN COP28 meeting, held in Dubai in December, few respondents saw it as an important moment. Some argued that the wording of the final agreement wasn’t strong enough, but the decision to “transition away” from fossil fuels was the first time the term had appeared in a formal COP outcome since the UN negotiations began 30 years ago. In the face of pressure from oil and gas companies, negotiators stood their ground and landed a decent deal.
And yet, just 8% of respondents saw COP28 as a turning point in global efforts to reach net-zero. Around 44% said it was “too soon to tell” in what is another clear sign of the severe lack of confidence in policymakers to follow through and foster action on net zero.
Q. Do you believe the recent COP28 climate summit marked a turning point in global efforts to reach net-zero?
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