The findings of Schneider Electric's Sustainability Index 2023 survey of over 500 decision-makers across corporate Australia has revealed businesses recognise the imperative of achieving net zero emissions as a key driver for economic competitiveness and climate resilience, but indicates many companies are not acting quickly enough to address this urgent challenge.
The report found that more than three-quarters (77 per cent) claimed that sustainable transformation is needed to drive a competitive edge for companies. In the food and beverage industry, this figure was 76 per cent, showing broad agreement on the benefits of sustainability.
Over two-thirds (69 per cent) of businesses also agree that Australia must meet net zero emissions targets to remain economically competitive. Here, 61 per cent of food and beverage industry leaders saw sustainability as an economic imperative, broadly in line with the national average.
Schneider Electric Pacific zone president Gareth O’Reilly said it was clear that businesses recognised 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,” said O’Reilly.
Despite growing awareness and commitment to sustainability, the survey showed that many businesses are falling short in implementing decarbonisation strategies.
Only 52 per cent of respondents across industries reported discussing or having a decarbonisation strategy in place. This indicates that a significant portion of Australian companies have yet to fully commit to the transition to a low-carbon future.
“To achieve the necessary emission reductions, it is essential that businesses set ambitious targets and map out the path to achieving them.
“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,” O’Reilly said.
When looking to 2030 decarbonisation targets, the survey showed that 42 per cent of companies expect to achieve zero Scope 1 emissions, which refers to direct emissions from owned or controlled sources. Additionally, 37 per cent aim for zero Scope 1-2 emissions, which adds indirect emissions from generation of purchased electricity, heating, and cooling consumed by the company. Finally, 34 per cent of businesses aspire to achieve zero Scope 1-3 emissions, which encompasses all indirect emissions in the value chain, including those associated with the procurement and use of products and services and are the hardest to achieve.
In the food and beverage industry, net zero expectations reach 39 per cent for Scope 1, 36 per cent Scope 1-2 and 36 per cent 1-3, showing broad alignment with the national average.
Comparisons across industries present a range of complexities in the road to net zero. The data underlines the need for industry-specific leadership on decarbonisation. Manufacturing leaders, for example, were some of the most likely to report that sustainability provides a competitive edge and is essential to Australia’s economic future, yet it is one of the least optimistic industries when it comes to reaching net zero across Scope 1, 2 and 3.
Conversely, healthcare leaders are among the most optimistic about their ability to reach net zero but had some of the lowest rates of positive engagement with sustainability as a competitive edge or economic imperative. This indicates leaders are facing varying challenges from industry to industry, requiring specific plans to drive sustainability engagement and impacts.
The Sustainability Index 2023 report underscores the need for immediate action and the importance of digital technology, with 78 per cent of companies acknowledging its key role in achieving sustainability goals. In food and beverage industry, this figure was 55 per cent well below the national average.
O’Reilly reiterated the urgency for businesses to act swiftly.
“Corporate Australia is ready to fully embrace sustainability, but we need to support businesses in turning these intentions to outcomes. Organisations must embrace sustainable transformation, prioritise digitalisation, and implement robust decarbonisation strategies now.
“The time for incremental change has passed; we must act with urgency to secure a sustainable and prosperous future. The moment is now,” said O’Reilly.
