Ashurst’s new Future Forces report draws from a survey conducted by Economist Impact in February-March 2023, involving 300 senior executives. Among the respondents, 51% hold C-suite positions, while the rest are in middle and senior management roles.
According to the report, 28% of the respondents view net-zero transition as both the most significant opportunity and the most significant threat to businesses.
Around 34% of respondents perceive the net-zero transition as a catalyst for developing more energy-efficient work methods. Additionally, 33% consider it an opportunity to attract talented individuals, while 30% see it as a chance to create innovative products and services.
On the other hand, 31% of participants identify the lack of essential technology and infrastructure as a challenge to achieving net-zero goals. Another 28% view the scarcity of skilled green talent as a hurdle, and 24% struggle with meeting shareholder expectations for growth while reducing carbon footprints.
Former executive secretary of the UN Framework Convention on Climate Change Christiana Figueres said: “While we have not yet reached commercial viability for many climate technologies such as smart building materials, smart grids and regenerative agriculture technology, that’s where all the startups are. We can see that we are moving into the future and setting a trend.”
Entrepreneurial skills can drive the net-zero transition through innovative technology development, the report notes. However, only 11% of businesses possess the required innovation capabilities, with the UK ranking lowest among all regions in this aspect, according to the report.
The report also notes that the decarbonisation of operations, including supply chains, will impact companies’ ability to address megatrends such as talent attraction and digitalisation.
Upskilling will play a dual role in the net-zero transition. It will help with identifying investment opportunities and developing green technology solutions, as well as monitoring carbon reduction targets for businesses, suppliers, and partners.
The report highlights that the push for decarbonisation in the net-zero transition remains a significant driving force for the adoption of energy-saving technologies. For example, the use of AI models to monitor energy consumption and identify opportunities for reduction.
According to the survey, 23% of respondents perceive investing in technological capabilities as beneficial for developing energy-saving technologies, while 19% believe it will enhance clean energy generation and storage.
To achieve net zero by 2050, an annual global expenditure of $6.5trn will be required for equipment and infrastructure, as per an analysis by McKinsey in 2022.
Ashurst’s global ESG partner Anna-Marie Slot said: “The opportunities are huge: estimates of the investment needed and number of projects required vary but the investment numbers are in the trillions.
“What does that mean to day-to-day business? It means change. Change driven by assessment, tracking, commitment, reporting and delivery of net-zero aligned solutions.”
According to the respondents, financial climate disclosure, supply chain transparency, and other ESG-related regulations are anticipated to have a greater impact on businesses compared to other regulatory developments in the next decade.