21 Sept 2022 - An overwhelming majority of business leaders surveyed in seven major economies agree government policies are necessary to deliver the net zero transition.
A new YouGov poll commissioned by the University of Cambridge institute for Sustainability Leadership (CISL) finds eight in 10 leaders of large businesses across five continents say they believe regulation is needed for their net zero ambitions and for economy-wide decarbonisation.
In the wake of this year’s IPCC mitigation report which suggested progress in policies, regulations and market mechanisms could be scaled up and applied widely to produce deep emissions reductions, the survey of businesses in the US, UK, Germany, South Africa, Brazil, India and Japan shows progress from the business community on developing net zero strategies, but that there are still major barriers to implementation, including a lack of clarity on policies and regulation across all countries.
The survey of more than 700 CEOs and senior business leaders found 80% agree government policies are necessary to address climate change, while 70% see regulation as important for their own company’s net zero ambitions. In addition, nearly 70% say they have some kind of net zero plan in place* and nearly 80 per cent say they have all or most of the investment required to achieve their net zero ambitions.
Clare Shine, Director and CEO, CISL said:
“Since Paris, there has been a wave of business ambition and commitment to addressing net zero and nature restoration, to the extent that this is now widely acknowledged by most businesses as central to the health of our economies, populations and environments. But in a world of competing pressures and crises, voluntary action can only progress us so far and to get us over the next line, where implementation at scale and pace can progress, it is great to see businesses across the world supporting the regulation needed to transform global economies and national sectors. These findings point to a situation where many large businesses feel they have the investment and plan to get them to net zero, now they need the right government policies.”
This November at COP27 in Sharm El-Sheikh, the UN Secretary General’s High-Level Expert Group on Net Zero Emissions Commitments of Non-State Entities will release its recommendations for improving net zero plans from non-state actors, such as businesses, at COP27. CISL’s survey offers context to the needs of the business sector to enable improvements to current net zero initiatives.
Catherine McKenna, Chair of the UN Secretary General’s High-Level Expert Group on Net Zero Emissions Commitments of Non-State Entities said:
“There is an emerging consensus coming from business executives that to deliver on the net zero plans that are already in place, clear policies and regulation on net zero are not only needed: they are wanted. We can’t continue to rely on voluntary commitments to deliver at the pace and scale needed for the challenge we are facing.”
According to the survey, there is strong support for net zero commitments in the UK, with more than half of companies having some form of net zero plan in place already. More than 80% surveyed in the UK believe government policies will be required to bring about the changes required for the energy transition and less than 50% believe business will drive the necessary change.
More than 60% of businesses surveyed in the UK believe technology will deliver the solutions to tackle the climate crisis, lower than the total across all other countries surveyed (75%). While more than 50% of UK businesses polled are relying on regulatory changes to support their own company’s net zero ambitions. A similar percentage of UK businesses surveyed – 52% - say they have the investment required to achieve their net zero ambitions and 57% are clear, or quite clear, on what potential funding options are available to them for the net zero transitions.
Polling was carried out during the UK Conservative leadership contest and before new Prime Minister Liz Truss was announced.
Beverley Cornaby, UK Policy Lead, Corporate Leaders Group UK said:
“UK businesses have high ambitions when it comes to net zero and many are grappling with the urgent need to implement their strategies and action plans. The survey points to how businesses in the UK can see the potential benefits of a stronger and more directional regulatory environment to drive economy-wide and individual business responses to the climate crisis. The new UK Prime Minister has the opportunity to refocus and prioritise the government’s response, supporting not just climate action, but also helping alleviate the energy crisis and creating greater economic stability.”
In the US, 71% of businesses surveyed agree government policies are needed for economy-wide net zero transformation and 68% think policy and the regulatory environment is important to their net zero ambitions. More than seven in 10 US businesses polled say they have all or most of the investment required to achieve their net zero ambitions. The survey was carried out before President Joe Biden’s Inflation Reduction Act was passed into law in the United States.
Overall, eight out of 10 companies across all countries surveyed agree a collaborative and systemic approach will help tackle the climate crisis. Businesses included in the survey had between 250 and more than 1000 employees, with 50 per cent of findings coming from businesses with 1000 or more staff.
Other findings indicate more than 85% of business leaders surveyed agree technology will deliver the solutions needed to tackle the climate crisis, with nine out of 10 Indian-based companies believing this to be the case. Relatedly, nearly eight out of 10 large businesses in the survey are relying on technology innovations to meet their own company’s net zero ambitions, with more than nine out of 10 South African business leaders in the survey expecting technology to solve their own business transition to net zero, while fewer than six out of 10 large UK businesses polled expect technology to be their solution.
Recently, a survey by the Confederation of British Businesses (CBI) found the energy crisis was putting net zero plans at risk as companies reined in green investment in order to manage soaring energy costs. The survey found three in 10 businesses were considering pausing or halting low carbon transition investment unless the new UK government acts to cut energy costs.
*The survey data does not include assessment of the quality of any net zero business plans.