Strong economic headwinds are not slowing climate ambition, but the speed of execution must at least double to meet commitments. Although more companies than ever have set a decarbonization target, our studies suggest that most will not reach them if they do not accelerate the pace of emissions reduction. It is critical to pursue a fusion of strategy and technology that incorporates intelligence on carbon and ESG—environmental, social, and governance factors—into decision-making, as well as accelerating the deployment of early-stage technologies, such as green hydrogen and sustainable aviation fuel (SAF).
Our analysis, conducted among the world’s largest 2,000 companies, indicates that net-zero emissions commitments have increased in all regions and in almost all sectors: a third (34%) have set publicly visible decarbonization targets, seven points percentage more than in 2021. Europe leads the way, with 51% of companies committing to net zero emissions targets, compared to 28% in North America. If current trends hold, only 7% of these large companies will meet their targets. Most of them would have to double their emission reduction rate by 2030, or even multiply it by five, to meet their commitments.
In the short term, attention to energy security may slow progress, but as the focus shifts from security of energy supply to affordability and shrinking margins, energy efficiency will become one of the most important tools. effective in reducing energy dependency, while addressing climate change. In the long term, we believe that the crisis will accelerate the transition to the zero grid. Despite the market turbulence, sustainability remains a priority: 84% of companies plan to boost green investment in 2023 and clean energy spending grew 11% in the first half.
Existing decarbonization solutions start with setting targets: companies with targets tend to reduce emissions faster than those without. And those with intermediate targets and more sophisticated measures, such as the use of renewable energy and internal carbon pricing, decarbonize even faster.
There are already mature solutions that can help accelerate the decarbonisation of many industries: for example, the switch from fossil fuel-based energy to renewable electricity. Significant reductions can also be achieved with existing digital technologies such as cloud, artificial intelligence, blockchainthe edge technology and digital twins. These technologies are critical to the use of ESG data, enabling organizations to become “carbon smart” by treating their carbon, energy, and other sustainability data as real business information that drives decision making. . In this way, companies can prioritize investments with an immediate and tangible impact, both to avoid emissions and to save energy, something very important when prices skyrocket.
These measures can often be as simple as fixing lighting in buildings or measuring electrical performance in greater detail. For example, Metro de Madrid, which developed ventilation based on artificial intelligence, reduced CO₂ emissions by 1,800 tons per year, while ensuring high air quality in stations. But some sectors will need innovative solutions, such as clean hydrogen and carbon retrieval for heavy industries, and sustainable fuel for air travel.
These solutions are still in an initial phase and their production is still low.
For this reason, collaboration is key: public administrations, private institutions, large companies, start-ups and industry sectors need to work together to make these innovative technologies economically viable and thus accelerate their uptake.
As an example, highlight the association of the European Commission with Breakthrough Energy, launched by Bill Gates. Its goal is to mobilize $1 billion in investment by 2026 to create large-scale commercial cleantech demonstration projects. Industry clusters are also a great example of collaboration as they implement solutions that would not otherwise be feasible for individual companies. This offers opportunities to scale up green technologies, enabling a systemic approach to reduce emissions. For example, the Humber industrial cluster in the UK, made up of energy and industrial companies and academic institutions, aims to offer low carbon hydrogen and CCUS.
We are convinced that through strategic thinking, innovative technology and increased cooperation, zero emissions goals can be achieved, even if the news and time are not on our side.
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