Businesses say regulation more than customers or investors drive their net zero efforts

More than 70% of businesses from eight sectors say government regulation is the most important driver for accelerating decarbonisation ahead of pressure from consumers and investors according to findings from a recent global study.

And more than 30% of the same business leaders said their company will still be reliant on fossil fuels into the 2050s, despite many having set net zero targets ahead of this date.

The study – the Corporate Climate Stocktake (CCST) – by a US non-profit, the We Mean Business Coalition, with support from the UN Climate Champions Team and management consultant, Bain & Company, included input from more than 300 of the world’s largest emitters and “analysis of eight key transition sectors: power, road transport, concrete and cement, steel, shipping, agriculture, aviation, and hydrogen.”

The CCST organisers said that while the UN’s Global Stocktake “has shown nation-states are falling short of their climate goals,” the CCST “finds the pace at which clean energy technologies are being developed and deployed continues to exceed expectations.”

The authors of the CCST said the evidence from the eight sectors analysed showed that while falling costs are helping businesses to step up rates of adoption of clean technologies, “In every sector, business leaders point to a range of transition barriers holding them back, from the availability of infrastructure to the realities of commercial.

The went on: “Nearly a decade on from the Paris agreement, the CCST calls on governments to recognise the inadequacy of existing international mechanisms and institutions for driving the global energy transition. It encourages major economies to focus on strengthening the multilateral coordination of industrial policy, with sectoral strategies as the central organising principle for climate action.

Partner at Bain & Company, Katherine Dixon,said: that while more than 90% of the world’s economic output is covered by some form of net zero target, and governments around the world are pursuing policies to reduce fossil fuel usage, “evidence shows it’s not enough.”

She warned that “It’s not just emissions targets, but the interplay of business innovation, industrial policy, and availability of capital that will determine the shape of our energy future.”