Worrying revelations from Schneider Electric’s fourth Sustainability Index have encouraged industry leaders to demand stronger government effort in galvanising the energy transition into action.
Spearheading the digital transformation of energy management and automation, Schneider Electric has once again illuminated corporate Australia’s stance on sustainability and energy efficiency via the Sustainability Index.
This year’s index presents the sobering statistic that more than 50 percent of Australia’s corporate decision-makers attest Australia’s energy transition is slow and onerous compared to other countries.
Government support crucial
The report reveals although businesses support the pursuit towards net-zero emissions, 40 percent of companies are not taking proactive steps to decarbonise and one in four companies cite no intention to reach net-zero emissions by 2050. Additionally, more than half of companies have not yet evaluated climate risks or created a transition plan.
Four out of five corporate decision-makers underscored the need for the government to invest in regulation and uplift the efforts of those aspiring towards clean energy. 81 percent of respondents argue the government should provide financial assistance to incentivise decarbonisation.
Disclosure rules will hold businesses accountable
Schneider Electric principal and senior director for sustainability business Lisa Zembrodt fears companies are embracing sustainability for the wrong reasons. “70 percent of businesses see sustainability as offering a competitive advantage and many don’t grasp the urgency of climate action,” she says.
Zembrodt says next year’s rollout of “climate-related financial disclosure regulations” leaves companies with no excuse for failing to have a decarbonisation roadmap. “Having a roadmap to transition your business to the low-carbon economy will be essential and companies should urgently develop and implement a net-zero plan,” affirms Zembrodt.
The International Sustainability Standards Board has established disclosure rules that mandate companies are transparent about climate-related governance, strategies, risk management and targets. Larger companies will be required to abide by these disclosure rules in January next year.
Encouraging hesitant companies to jump on board
Zembrodt says while 72 percent of companies are predicted to reach net zero by 2050, there is a glaring divide between enthusiastic and “progressive” companies and those hesitant to commit.
“There is an ongoing divide between the progressive companies and those yet to act – but time is running out,” said Zembrodt. “We need to bridge this divide by sharing knowledge and resources across industries, being clear on expectations, and looking to governments for leadership and support.
Zembrodt says it is wasteful for companies to not capitalise on the readily accessible tools and technology that assist in slashing emissions and streamlining efficiency.
“Progressive companies are optimising their sustainability and emissions performance and with that, they’re improving efficiency and able to better attract capital,” she says.
Obstacles to adopting sustainable solutions
The report reveals companies are experiencing a clash of priorities in the decarbonisation journey, mainly implementing sustainability measures while considering profitability. Some renewable energy options come with a hefty cost, however, 71 percent of companies confirm the high cost is worth the reward.
Other roadblocks to sustainability companies cite include a general malaise towards decarbonisation, in addition to limited data collection methods and scant financial resources and government incentives.
The full report is available here.
Compare this year’s Sustainability Index to last year’s results.
