Zeronomics: Asean companies transitioning too slowly, leaving 2050 net zero emissions goal at risk
KUALA LUMPUR: Three in five Asean-based companies are not transitioning to net zero fast enough, leaving them in danger of missing the Paris Agreement target of net zero carbon emissions by 2050, new research from Standard Chartered has revealed.
Zeronomics, a study into the financing of a net zero world, surveyed the senior leadership of 250 large companies and 100 investment specialists around the world between September and October 2020 and found that 60 per cent of Asean-based business leaders believe their companies are not transitioning fast enough (55 per cent of companies globally).
The study also found that lack of support from their own investors is the biggest barrier to progress for companies in this region, cited as a significant obstacle by 73 per cent (60 per cent globally)
Additionally, carbon-intensive industries and companies based in emerging markets are struggling most with the transition while just 40 per cent of Asean-based companies fully support the aims of the Paris Agreement (47 per cent globally).
Many Asean companies are looking to delay significant action to after 2030, with the 2020s looking set to be a lost decade.
Just 20 per cent of business leaders (34 per cent globally) said their companies will make the most progress between 2030 and 2040, while 53 per cent (37 per cent globally) said they will take most action between 2040 and 2050.
Most companies are delaying transition because they do not feel they are currently equipped to meet the target.
Some 60 per cent (59 per cent globally) said they need extensive organisational change before tackling net zero.
A lack of investor support isn’t the only hurdle companies in Asean face.
Some 70 per cent (67 per cent globally) of business leaders believe a lack of finance is hampering transition, while seven in ten (60 per cent globally) believe that a lack of support from executive leadership is a significant obstacle.
Meanwhile, Covid-19 is forcing many businesses in the region to focus on immediate survival: A whopping 97 per cent (85 per cent globally) of senior executives say the pandemic has delayed their company’s net-zero transition.
The research also reveals what business leaders believe is needed in order to speed up transition.
Some 90 per cent of Asean companies (81 per cent globally) cite cost savings from sustainable practices or increased operational efficiency, making it more attractive financially to move to net zero would speed up transition.