Decarbonizing the heavy industry sector—including freight and logistics operations—is key to reaching climate goals, as fewer than one in five companies worldwide (18%) are currently on track to reach net zero emissions in their operations by 2050, according to research from Accenture.
Although more than a third (38%) of companies say they cannot make further investments in decarbonization in the current economic environment, Accenture identified a path to breaking the stalemate. Industry leaders could turn the trend around within only three years by reinventing decarbonization strategies that enable growth for energy-intensive, hard-to-abate heavy industry—such as steel, metals and mining, cement, chemicals, and freight and logistics—the operations of which generate 40% of total global CO2 emissions.
Heavy industry reinvention is critical to achieving all global net zero targets—both as the world’s biggest emitters and due to their interdependence with manufacturing, or “light” industry, which includes pulp and paper, aerospace and defense, automotive, industrial equipment, life sciences and consumer goods.
The “Destination net zero” report was released ahead of the 28th UN Climate Change Conference of the Parties (COP28), and analyzes net zero commitments, decarbonization activities, and emissions data for the 2,000 largest companies globally.
Accenture found some reason for “tempered optimism,” saying that the number of companies that have set targets for net zero has risen to 37%, up from 34% last year. But their actions don’t match those goals—half (49.6%) of the companies that disclose emissions data have presided over increasing emissions since 2016. And one-third (32.5%) are cutting emissions, but on current observable trends are not on track to reach net-zero in their operations by 2050.
“It’s promising to see an increase in public commitments to net zero targets again this year, but the adoption of key decarbonization measures is not uniform, with some companies still unable to master the basics,” Jean-Marc Ollagnier, CEO of Accenture for Europe, Middle East and Africa, said in a release. “Reaching net zero is a unique opportunity for every organization to reinvent themselves and their value chains by aligning business growth with the net zero imperative, despite the many obstacles they must overcome. However, it is not just an enterprise challenge but also an ecosystem one, as there is a need to address the disconnect between supply and demand.”
To identify specific steps in the path forward, the report identified three areas where the economics of decarbonization and a structural misalignment between industries are at the core of what’s constraining progress:
- Improved access and availability to affordable, low-carbon energy is required: Four out of five (81%) leaders from heavy industry expect to need more than 20 years to have sufficient zero-carbon electricity to decarbonize their industry, with energy providers primarily focused on decarbonizing their own operations.
- There is a need to bolster confidence in the commercial viability of low-carbon products: 95% of heavy industry leaders expect to need at least 20 years to deliver net zero products or services at or close to price parity with high-carbon alternatives, and just over half (54%) say that manufacturers' future purchasing intentions give them enough confidence to invest in decarbonization.
- Concerns about managing the costs must be addressed: Two in five (40%) leaders in heavy sectors said they can't afford further investment in decarbonization in the current economic climate, with 63% suggesting their priority decarbonization measures won’t be economically attractive before 2030.
