One-third of businesses do not have the budget to reach net-zero

A new survey has found that while more than 80% of businesses have set targets to reach net-zero emissions, more than one-third do not believe they have the budget to do so, with others also bemoaning a lack of data and a changing regulatory environment.

One-third of businesses do not have the budget to reach net-zero

Half of the world’s 100 largest private companies do not currently have emissions reduction targets.

A survey of more than 1,000 businesses globally, including more than 100 UK firms, from data management firm Hitachi Vantara found that 82% now have net-zero carbon goals in place. The survey found, however, the goals do not necessarily translate to strategies or implementation plans, with 34% of businesses claiming they were yet to put plans in place to reach their goals.

Many businesses have set long timeframes for net-zero, averaging at a deadline date of 2046 based on survey respondents, which means that some still view this as a long-term issue, explaining the lack of implementation plans.

Other barriers cited by businesses were to do with relegation, budget, and date. Almost half of the respondents (45%) stated that keeping up with changing regulations was the biggest challenge, while 38% claimed they did not have the budget to achieve their sustainability goals. One-third of businesses also claimed they had inadequate data to start on their net-zero journey.

While regulation was listed as the biggest challenge it was also the primary driver for businesses, with 66% claiming that complying with regulation was pushing them toward their net-zero goals. Other drivers cited include ethical obligations (58%) and cost optimisation (47%).

“To get to net-zero goals, firms must establish a concrete strategy and implementation plan, with leadership buy-in, that takes a broad view of emissions,” Hitachi Vantara’s global solutions manager of digital infrastructure Lynn Collier said.

“As the survey found, too many organisations are allowing their strategies to be dictated by the pace and direction of regulation, which can be a hindrance because it focuses on the needs of the day instead of considering the business case for sustainable operations, and the growth potential it has for the future.”

Deprioritising net-zero

Budgets have been impacted in recent years by the need to respond to firstly the pandemic and then the energy cost crisis. Indeed a survey from November 2022 conducted by edie found that one-fifth of businesses had to de-prioritise work related to the net-zero transition due to the current economic crisis.

The challenges are even more profound for smaller businesses.  BSI’s new net-zero barometer, which polled 1,000 senior decision-makers at small and medium-sized businesses (SMEs) earlier this year found that half of SMEs do not yet have a net-zero plan or policy.

Moreover, only one-fifth of SMEs are measuring and reporting progress to cut emissions in a standard way. These findings suggest that many businesses are yet to embed the net-zero transition into their strategic planning, despite increasing pressure to do so from customers and investors.

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