Businesses urge government support for energy transition

Australian businesses are calling for increased government support to accelerate the energy transition, even as many struggle to implement their own decarbonisation strategies, according to Schneider Electric"s Sustainability Index, 2024.

The survey reveals a complex landscape where corporate ambition for sustainability clashes with operational realities.

While most business leaders recognise the competitive advantage of sustainable practices, a significant portion remain inactive in their decarbonisation efforts.

Key findings show that 40 per cent of companies are not acting to decarbonise, and a quarter have no plans to reach net zero by 2050.

Alarmingly, less than one in five companies have a comprehensive decarbonisation roadmap in place.

Lisa Zembrodt, Schneider Electric principal and senior director of Sustainability Business, warned that many companies risk exposure under upcoming climate-related financial disclosure regulations.

"With new regulations rolling out next year, having a roadmap to transition your business to the low-carbon economy will be essential," Zembrodt said.

The survey highlights a growing expectation for government intervention, with 80 per cent of corporate decision-makers advocating for government support in the energy transition.

This sentiment is reflected in the 81 per cent who believe financial incentives are necessary for viable sustainable transformation, up from 76 per cent last year.

Despite these calls for support, the private sector"s own efforts appear to be lagging.

Only 72 per cent of companies expect to reach their net zero targets by 2050, based on current projections.

This slow progress is attributed to various factors, including lack of financial resources, perceived lack of urgency, and insufficient government incentives.

The report also underscores a significant data gap, with two-thirds of respondents citing a lack of data as impacting their decision-making.

Many companies still rely on basic methods like bills and spreadsheets for energy data collection, hindering their ability to monitor and improve efficiency.

Notably, while 70 per cent of companies are discussing Scope 1, 2, and 3 emissions, only 10 per cent have strategies in place for managing Scope 3 emissions, which occur throughout their value chain.

On a more positive note, the perception of Australia"s global standing on climate action has improved slightly.

Now, 54 per cent of respondents believe Australia is falling behind other countries, down from two-thirds last year.

This shift may be attributed to recent federal initiatives, including the establishment of a Net Zero Authority and the introduction of climate reporting rules.

However, the normalisation of sustainability progress is evident, with a slight decrease in the percentage of leaders who view sustainable transformation as a competitive edge (70 per cent, down from 76 per cent last year).

As businesses navigate these challenges, the survey results underscore the need for a coordinated approach between government and industry to drive meaningful progress in Australia"s energy transition.

With new disclosure regulations on the horizon, companies face increasing pressure to develop and implement robust decarbonisation strategies.