The majority of businesses in the world’s richest countries are committed to a net zero target, new research from global law firm Ashurst found.
In its survey, the firm found that almost 70 percent of organisations had already committed to a net zero target, with an additional 28 percent having one under development already. Net zero targets were most common in organisations based in Europe and North America, with 76 percent of respondents in both geographies reporting targets were in place. These two were trailed by other markets, including Australasia and the UK.
“This research highlights how rapidly investment in clean energy projects is accelerating, particularly when compared to just one year ago,” Michael Burns, partner and head of energy for EMEA/US at Ashurst, said in a statement.
The top three strategies organisations are using to meet net zero goals were: reducing own emissions (57 percent), acquiring carbon offsets (48 percent), and investing in renewable energy projects (48 percent). Furthermore, only 37 percent are planning to reduce emissions in their supply chains, with just 19 percent setting science-based targets.
Seventy-two percent of respondents also said that their strategies had changed over the past year, with further expectations that they would need to continue to change amid the energy transition. While 19 percent said that they had changed strategies but did not expect them to change again.
Solar energy is the most favoured renewable energy source at 69 percent, up from 52 percent last year. This has been driven in part by the number of organisations considering using solar energy in the next five years nearly doubling, from 22 percent to 42 percent. In hydro power, investment has dropped off, to 37 percent this year versus 43 percent last year, with a similar dynamic at play in onshore wind – at 42 percent in 2020 versus 33 percent in 2021.
“As the energy transition continues to gather pace, we expect to see investments being made both in projects that have clear government support but also, for those seeking higher returns or prepared to deploy capital earlier, investments in earlier stage project developments, including innovative energy storage, low carbon hydrogen and carbon capture and storage,” Burns said.
Respondents identified battery storage as a key area of investment for non-power generation technology, with 67 percent reporting investment compared to 26 percent last year. Battery storage was followed by electric vehicles, carbon capture, utilisation and storage solutions (CCUS), and smart meters.
“Confidence in technology is growing and will bolster the willingness of organisations to invest. However, as our research identifies, business strategies will also be influenced by the availability of greenfield developments and access to an appropriately skilled workforce,” Paul Curnow, partner and head of energy for APAC at Ashurst, commented.
Despite the increased levels of investment, Ashurst’s research also found that businesses are concerned about the barriers to investment, with a lack of commercial incentives or economic benefits pointed to as the biggest barrier.
“As we move towards a carbon neutral world, it is clear many organisations will need to develop new business models. They will also need clear policy directions from governments to plan for a clean energy future,” Curnow said.
