From the archives: Greater care and attention necessary for decarbonisation process

by Sam McLeod
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This month on Facility Management we’re revisiting some of our most popular and thought-provoking articles from the last year. Schneider Electric’s ‘Sustainability Index ’ report from last August revealed that while some companies are staunchly embracing decarbonisation, attention and care is needed to guarantee successful implementation.

Companies’ attitudes toward decarbonisation

Over 500 corporate decision makers were surveyed across a range of Australian industries, including retail trade, manufacturing, educational and training, healthcare and construction. The report found that respondents viewed decarbonisation as offering multiple appealing benefits.

Moral reasons topped the list, with 42 percent viewing a commitment to decarbonisation as important for doing their part in combating climate change. The next most important reasons given for a commitment to decarbonisation were government regulations (34 percent), climate-related risks (33 percent) and concerns about brand perception (32 percent).

The top perceived benefit given for adopting sustainable solutions was the reduction of the company’s carbon footprint, at 60 percent – up from 57 percent in 2022. Sustainable transformations are also viewed as integral to company success, with 77 percent agreeing that they drive a competitive edge for companies.

Barriers to adopting sustainable solutions

The main barrier stopping companies from adopting sustainable solutions is a lack of financial resources for investment, alongside a lack of government incentives, both at 41 percent.

Indeed, 76 percent of business leaders believe that financial incentives are necessary for sustainable transformation to be viable.

The report acknowledges that these financial limitations may be addressed by the Government’s Federal Budget for 2023-24, which allocates around $4 billion toward energy transition plans.

The challenge of energy volatility

The current global energy supply crisis also poses a significant concern to the Australian organisations surveyed. The report identified cost/risk management in the face of energy volatility as the top energy and resource supply concern (42 percent).

Concerns about cybersecurity breaches also topped the chart (42 percent) in the wake of shock hacks targeting Australian organisations Optus and Medibank.

Worryingly, only 32 percent of companies are confident they are able to manage energy supply price and volatility. Yet improving energy efficiency and switching to renewable energy sources may be protective against future energy supply and price volatility.

“Many of the steps companies can take to improve energy efficiency and introduce their own renewable energy supply will not only improve their bottom line, but also protect them from volatility in energy supplies and pricing,” says Schneider Electric’s pacific zone president Gareth O’Reilly.

Making decarbonisation efforts a priority

Consumers, now more than ever, expect companies to commit to decarbonisation and other sustainable practices. The report cites evidence from The Investor Group on Climate Change (IGCC), which found that most investors (70 percent) in 2022 had set a 2050 net-zero emissions target over all or part of their portfolio.

Despite this, only 53 percent of companies have either started discussion on producing a decarbonisation roadmap or already have a strategy in place. And nearly a quarter (24 percent) report not viewing it as a priority.

Digital data: a key, grossly underused enabler for achieving sustainability targets

The report found that although 78 percent of respondents agreed that digital is playing a key role in achieving sustainability goals, this isn’t being realised in business practices.

Many businesses continue to use rudimentary data collection methods, with only a third using software to collect energy data. Similarly, only a third of companies are leveraging energy management systems data.

This is despite digitisation having proven impacts on facilitating the reach of sustainability targets for companies. Businesses already investing in digitisation and data automation are predicted to achieve their net zero ambitions much faster than companies that neglect these opportunities.

Implementing decarbonisation plans

O’Reilly emphasises that the challenge for business lies not in recognition of the importance of sustainability goals, but in implementing the practices to achieve these targets.

“It’s clear that businesses recognise the strategic importance of sustainable transformation. With less than 80 months until 2030, the challenge for businesses now is to fulfil that strategic opportunity at pace,” O’Reilly says.

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