- 77% of Australian businesses believe going green will provide a competitive edge.
- Few businesses have a concrete strategy for achieving sustainability.
- A majority of businesses believe net zero will keep Australia economically competitive.
A survey of over 500 decision-makers across corporate Australia has found that a vast majority believe a greener future is critical to both business and national success.
Key findings in Schneider Electric‘s Sustainability Index 2023 include a three-quarters (77%) majority who believe sustainable transformation will deliver a competitive edge, and a more than two-thirds majority (69%) who agree that Australia must achieve net zero to remain economically competitive.
“It’s clear that businesses recognise the strategic importance of sustainable transformation. With less than 80 months until 2030, the challenge for businesses now is to fulfil that strategic opportunity at pace,” said Schneider Electric pacific zone President, Gareth O’Reilly.
Implementation falling short
While businesses have been growing more aware of, and committed to, addressing Australia’s sustainability challenges, the survey finds that their implementation of decarbonisation strategies has been lacklustre.
A mere 52% of respondents have discussed or utilised a decarbonisation strategy in their businesses. In other words, about half of Australian companies have not committed to assisting the nation’s move to a zero-emissions future.
The survey shows how businesses struggle with energy challenges. Risks and costs incurred from energy supply and resource problems were highlighted as the most critical issues by 42% of companies. As electricity prices continue to climb upward, only 32% of companies are confident they can manage energy price volatility.
Furthermore, 27% of those surveyed articulated anxieties over the reliability of Australia’s power grid, demonstrating the necessity for a sustainable and robust energy infrastructure.
Notably, businesses expressed that they needed more resources to transition to sustainable energy, and that they needed more government incentives to do so.
“To achieve the necessary emission reductions, it is essential that businesses set ambitious targets and map out the path to achieving them,” O’Reilly says.
“Many of the steps companies can take to improve energy efficiency and introduce their own renewable energy supply will not only improve their bottom line, but also protect them from volatility in energy supplies and pricing.”
Neglecting Scope 3 emissions
Although most companies have pledged some commitment to reducing their Scope 1 and Scope 2 emissions, few have given consideration on Scope 3 emissions. 42% of companies expected to reach zero Scope 1 emissions, direct emissions from owned or controlled sources. Meanwhile, 37% aimed to reach zero Scope 2 emissions, which refer to indirect emissions generated from purchased electricity, heating, and cooling used by the company.
Only 24% of businesses wanted to reach zero Scope 3 emissions, which comprises all indirect emissions in the value chain, like those associated with procuring and using products and services. Zero Scope 3 emissions is the most difficult level to attain.
Tackling sustainability through demand
Underscoring the survey is the urgency for more action and the need to embrace digital solutions in achieving our sustainability goals, with 78% of companies recognising that digital technology is vital in the race towards sustainability.
“Corporate Australia is ready to fully embrace sustainability, but we need to support businesses in turning these intentions to outcomes,” said O’Reilly.
“Organisations must embrace sustainable transformation, prioritise digitalisation, and implement robust decarbonisation strategies now.”
“The time for incremental change has passed; we must act with urgency to secure a sustainable and prosperous future. The moment is now.”
Gareth O’Reilly, Schneider Electric Pacific Zone President
Most sustainability efforts have been focused on decarbonising the energy supply, such as moving from fossil fuel to renewable energy sources. Therefore, the report argues that the demand side of the decarbonisation equation remains critically unaddressed.
Demand-side solutions include technologies that manage and automate energy use, energy storage, and renewable energy solutions on-site.
These technologies will reduce the carbon footprint of businesses while also lowering energy bills, a benefit that is no doubt valuable to businesses that are doubtful of their ability to shoulder energy volatility issues.
One relevant technology gaining prominence is Grid-interactive Efficient Buildings (GEBs), fully electric buildings designed to use energy more efficiently.
Able to interact with the electrical grid, these buildings can reallocate energy to times when it is cheaper and cleaner. For instance, they draw upon energy storage or lower the building’s energy consumption when the grid is at peak load. In doing so, they can help companies operate greener, cheaper, and help improve the reliability of the electric grid.
