Businesses embarking on journeys to net zero, ICAEW survey reveals

DigitalCFO Newsroom | 3 November 2021

  • More than half (59%) of organisations surveyed have taken action to move towards net zero carbon emissions
  • Almost two-thirds say there are business opportunities associated with net zero targets
  • Top challenges include the lack of requirements set by public authorities (57%), not seeing a business case for action (45%) and no demand from consumers (43%)

A new survey from international chartered accountancy body ICAEW has provided new insights on how its members in different parts of the world and the organisations they work in are taking steps to address climate change.

The results of the survey, conducted in late September 2021, highlight the need for governments to put appropriate public policy frameworks in place, alongside changing consumer behaviours, to further drive business change towards net zero.

As the 26th UN Climate Change Conference (COP26) progresses, findings from ICAEW’s outreach to international members suggest that organisations across the globe are starting to step up to the challenge, with a majority (59%) now taking action to move towards net zero carbon emissions.

Q: Is your organisation taking any action to move towards net zero carbon emissions?

Q: Does your organisation see business opportunities associated with moving towards net zero targets?

Many of the organisations also saw business opportunities associated with moving towards net zero (64%) – which were viewed as significant opportunities by just under a third. Over a third of ICAEW members said their organisations have already set internal targets for climate-related opportunities.

Challenges faced by organisations embarking on their journey to net zero

While many members said their organisations are responding to the challenge, there are still challenges that stand in the way of progress.

Those that are not yet taking any measures are often not doing so because of limited internal and external pressure for change.  43 per cent of organisations cited the absence of external demand from consumers or clients, as a critical constraining factor.

Businesses alone will not be able to solve all the issues associated with climate change, particularly where there is no immediate imperative to change. This points again to the key role that public authorities across the world will need to play to lead the transition to net zero, such as by enabling intelligent partnerships with businesses to change consumer behavioural patterns.

About a third of organisations (29 percent) said they are not taking any action to reach net zero because they remain focused on dealing with the impact of the COVID-19 pandemic. Many also said that they were not taking action because they didn’t see a business case for action (45%) and a lack of leadership commitment (30%).

Q: Why is your organisation not taking any action?

Supporting organisations’ climate activities

Addressing the risks and embracing the opportunities associated with climate change is a work in progress, with organisations at different points in the journey.

Two in five organisations said they have now allocated responsibility to senior management to deal with climate change and that it is now embedded in their organisation’s strategic planning process. In addition, one-third of organisations had already integrated climate change into their risk management.

As organisations continue to progress on their net zero journeys, they will require guidance to support their activities. This ranges from technical guidance such as accessible scientific and market data, to broader best practices or benchmarks such as “how to” guides and regulatory advice.

Richard Spencer, ICAEW Director of Sustainability, said:

“The survey underlines the critical importance of closing the gap between ambition and action. COP26 needs to get all countries over the line and ensure that binding net zero plans are put forward by those yet to do so and that these are supported by credible pathways supported by well-targeted policies and regulations that bite.”

“This will help accelerate necessary investments in adaptation and mitigation efforts by both private and public sector, while enabling businesses to also seize the opportunities associated with a more sustainable way of doing business.”

Mark Billington, ICAEW Regional Director, ICAEW Managing Director, International, said:

“Organisations around the world are at different points in the journey to address climate change. This is not necessarily a straight path: the more organisations do, the more they may realise the amount of change that is needed – including when it comes to reporting”.

“It is no surprise, therefore, that many international members have told us that they want more support to help them and their organisations on this journey. Their feedback provides us with valuable input as we further develop our resources to ensure all our members are professionally ready to address the climate change challenge, wherever they are located.”