Corporate giants ‘gearing up for substantial net-zero investment increase’

This is based on new research conducted by global business financial research organisation East & Partners and the communications consultancy Impact & Influence.

The research represents a positive development following a report from last week, which indicated that 82% of corporate executives are concerned about the potential impact of the energy crisis on their ability to achieve decarbonisation objectives.

Industries with high carbon footprints, such as manufacturing (26.9%), logistics and transport (24.3%), and resources and mining (22%), are the ones planning the most significant year-on-year increases in net-zero spending.

Impact & Influence’s chief executive officer Rishi Bhattacharya said: “This surge in spending will be driven by a host of different factors including compelling climate change science, industry, business and supply chain risks, investor appetite, public and political pressure – and, of course, commercial opportunity.

“Whatever their motivations, action and innovation by these businesses will be pivotal to protecting the planet.”

International divides

Companies in the world’s highest carbon-emitting nations are also planning to increase their investments in pursuit of net-zero goals.

US-based firms, for instance,  will increase investment by an average of 28% year-on-year, followed by Chinese and Indian businesses with increases of 18% and 12%, respectively.

Firms based in the United Arab Emirates, which is hosting COP28 in November and December, plan to boost their yearly spending on carbon emission reduction by an average of 21%.

In contrast, Kenyan companies have the lowest average increase in net-zero spending plans among the studied markets, at 7.7%, indicating that Africa might be lagging in accessing sustainable finance.

Last week, global leaders convened in Kenya for crucial deliberations on strategies to expedite climate adaptation and decarbonisation efforts in African nations.

East & Partners’ co-founder Paul Dowling said: “It’s encouraging that the world’s largest companies are planning to dial up their capital investment to reduce their carbon emissions, which will be critical to combating global climate change.

“Most leading transaction banks are targeting net-zero financing as a growth revenue stream, and they account for just under half of this large corporate lending market, but at the same time alternative sustainable finance providers are rapidly capturing market share.”

According to the research, approximately 44.5% of businesses intend to secure net-zero finance from their current primary transaction bank, while 17.7% plan to seek alternative providers than their main lender. Similarly, around 18% of respondents intend on using a specialised sustainability lender.