Only 18% of companies on track to reaching net zero by 2050

28 November 2023 3 min. read
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Global companies are woefully behind in sustainability initiatives, with less than a fifth (18%) on track to meet net zero emissions by 2050. That is according to a report from consulting firm Accenture.

In addition to the low percentage of companies that are on track to meet their net zero goals, another 38% of companies reported that they were not able to make further investments in their operations in the current economic environment.

The report from Accenture, released just ahead of the UN COP28 summit in the UAE, analyzed net zero commitments and decarbonization data from 2,000 of the largest companies in the world. The study also included a survey of over 1,000 executives across 14 industries.

Only 18 percent of companies on track to achieve net zero by 2050

Source: Accenture

According to the analysis, business leaders still have the power to change course within only three years if they are able to radically change their decarbonization strategies, particularly for hard-to-abate heavy industries like metals manufacturing, mining, cement, chemicals, and freight transportation. Operations in these sectors generate around 40% of global CO2 emissions.

In the lead for being on track with cuts to emissions are industries like insurance, utilities, capital markets, and retail – all industries with low carbon footprints to begin with. Lower on the list are industries that are simply harder to abate for various reasons, like energy, which was 64% off track, and natural resources, 60% off track.

Helping the heavy industry move forward

“The rapid, affordable decarbonization of heavy industry requires collective action across the value chain and urgently compressed transformation. We believe this can break the economic stalemate by inspiring new levels of growth and help accelerate net zero in just three years of focus. If heavy industry is burdened with the full cost of decarbonization and fails to meet net zero targets, all industries will fail,” said Stephanie Jamison of Accenture.

According to survey data from the report, 81% of business leaders in heavy industry said they would need at least another 20 years in order to secure sufficient access to zero-carbon electricity to run their operations. The supply is just not there yet to satisfy some of the most energy-intensive industries, with energy providers still mostly focused on just decarbonizing their own operations.

And if the low-carbon energy supply is indeed there, it is too expensive. Heavy industry leaders said they would also need around 20 years before they are ready to offer net zero products or services at a price that is somewhat close to the currently available high-carbon options.

“Reaching net zero is a unique opportunity for every organization to reinvent themselves and their value chains by aligning business growth with the net zero imperative, despite the many obstacles they must overcome. However, it is not just an enterprise challenge but also an ecosystem one, as there is a need to address the disconnect between supply and demand,” said Jean-Marc Ollagnier, CEO of Accenture for Europe, the Middle East, and Africa.

A previous report showed that up to 90% of a company’s carbon footprint goes back to their supply chain, underscoring the importance of procurement in a company’s decarbonization efforts. That extends to the notoriously difficult-to-reach scope 3 emissions, or those that are beyond the assets actually owned or operated by a company.