LONDON – As the world prepares for COP28, a new report from Accenture (NYSE:) and The Smart Cube reveals a concerning trend among the globe’s largest companies, with only 18% on track to achieve net-zero emissions by the mid-century mark. Despite a significant number of these companies, 37%, having set targets for reducing their carbon footprint, nearly half have experienced an increase in emissions since 2016.
Accenture’s CEO for Europe, Middle East and Africa, Jean-Marc Olinger, points to the need for a transformation in heavy industry as essential to meeting global net-zero objectives. The report outlines several hurdles that businesses face on this front, including securing affordable low-carbon energy sources, ensuring the commercial viability of low-carbon products, and managing the costs associated with decarbonization efforts.
Stephanie Jamison of Accenture also stresses the importance of reinventing heavy industries to achieve net-zero targets. She notes that economic and structural disparities across industries create barriers to progress. The report reveals skepticism among industry leaders about the availability of zero-carbon electricity and the competitiveness of low-carbon products. A staggering 95% of these leaders do not expect to achieve price parity with high-carbon alternatives for at least two decades.
In light of current economic pressures, two out of five leaders in heavy industries express concerns about funding further decarbonization initiatives. To address these challenges, Accenture’s recommends urgent action within the next three years. These steps include targeting green premiums—additional costs consumers are willing to pay for greener options—accelerating the adoption of low-carbon power and hydrogen solutions, and driving down capital and operating expenses related to green technology.
The report is optimistic about potential cost reductions in areas like green steel production, projecting a decrease of up to 49% by 2050. It also forecasts significant drops in the levelized costs of solar power and green hydrogen—77% and 74%, respectively—by the same year. These projections underscore Accenture’s commitment to fostering comprehensive value through sustainability.
For lighter industries, the path forward involves taking on the initial costs of decarbonization and strategically choosing which green products to develop. Encouragingly, almost two-thirds of executives in oil, gas, and power sectors believe their customers are ready to commit to long-term partnerships focused on reducing emissions. Furthermore, over half of heavy industry executives see revenue growth as a key driver for making the economic case for decarbonization more attractive.
The findings from Accenture highlight both the challenges and opportunities that lie ahead on the journey to a more sustainable future. As COP28 approaches, these insights could prove crucial for businesses aiming to align their strategies with global climate goals.
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