Carbon neutrality: the ultimate goal

You’ve just released a study on carbon neutrality looking at the appetite and attitude of more than 400 business leaders to go carbon neutral by 2050. Why did you conduct the research?

The last few months have been remarkable for many reasons, with the pandemic reminding us of the relative fragility with which we live and interact with our environment.

Once the consequences of Covid-19 have subsided, there will be a strong temptation to rebuild everything to exactly how it was. However, we should take the Paris Agreement – adopted by 197 countries – seriously and find ways to rebuild that allow us to contain global warming to less than two degrees.

That will only be possible by balancing demographic and economic growth with strict environmental concerns, which requires legislation and financing to reach decarbonisation goals. Stimulus packages for this transition run into the billions of euros.

With this in mind, we thought it would be interesting to survey the opinions of business leaders in France and take a snapshot of the situation as it stood at the end of 2020. This snapshot includes different sectors and company sizes in order to understand the dynamics among the sectors that emit the most CO2, and to discover the reality at the local business level.

What are some of the survey’s key findings?

We found that carbon neutrality is only a priority for a small majority of business leaders in France. Less than one in two companies surveyed has implemented ‘low-carbon’ actions and only one in four executives is committed, or has planned to commit, to implementing a carbon neutrality project.

Similarly, very few executives (16%) carry out their carbon neutrality objectives in the form of a roadmap with concrete milestones, measurement indicators and an associated budget.

While some business leaders see carbon neutrality as an opportunity for the sustainability of their company, others also see it as a potential threat with significant differences from one sector to another. One in two business leaders (53%) think they will have to significantly adapt their business model to achieve carbon neutrality.

How do different sectors and sizes compare?

The energy sector had the most respondents that view carbon neutrality as an opportunity, while scepticism was most prevalent in the transportation sector.

Around 70% of companies in the energy and agriculture sectors have made carbon neutrality a priority, far ahead of the transportation sector (52%) and the transportation manufacturing sector (44%). The industrial sector at large is the furthest behind with just 31% of respondents saying they had made it a priority. With 68% of positive responses, agriculture and the construction sector are the most advanced in implementing concrete low-carbon actions, likely pushed by specific regulations related to these businesses.

In terms of size: 62% of large companies consider carbon neutrality to be a priority with SMEs close behind (60%). Less than half (46%) of leaders from very small companies (1-20 employees) view carbon neutrality as a priority. This may be attributed also to the importance of regulations, as large companies are often subject to non-financial performance reporting requirements, including the measurement of their CO2 emissions.

What is stopping leaders from achieving carbon neutrality and what is accelerating progress?

Lack of knowledge is a big factor. Only one-third of those surveyed know the tools and methodologies for defining, measuring and achieving a carbon neutrality strategy. Only 16% of companies with less than 500 employees have already carried out a carbon assessment and 17% of all companies have conducted carbon lifecycle analyses. This rise to 40% of large companies and 31% of companies in the construction sector.

Lack of internal resources is another. Small companies and certain business sectors (especially industry and transportation) have difficulty understanding the mechanisms that will enable them to build a net-zero emissions pathway due to a lack of internal resources and skills and a detailed knowledge of existing tools and methodologies that could help them. Only 40% of executives believe they have the human resources and skills needed to achieve this goal, that figure rises to 51% for large companies and intermediate sized companies (‘entreprises de taille intermédiaire’).

What did respondents say would help them with their carbon neutral journey?

Simplified funding: 60% of managers would like to simplify and reduce administrative procedures to access aid and funding and accelerate the implementation of projects.

There is also the question of tax. Respondents told us they would welcome the introduction of carbon taxes at European borders that would boost the competitiveness of products, compared to companies outside Europe which may not bear a specific carbon tax, with a carbon footprint that was compatible with the Paris Agreement. This would also reward good performers and industries investing in green technologies.

And thirdly, more collaboration. Some 42% of those surveyed would like to bring all stakeholders, major public and private contractors and investors to the table. A company cannot move towards carbon neutrality without the contribution of its entire ecosystem.

How do you see the role of the business in the world going carbon neutral?

The two-degree goal will not be achievable without the commitment and contribution of business. While governments have to lead by guiding and encouraging everyone to reduce carbon emissions, as evidenced by the unprecedented acceleration of legislation and regulations, the role and ‘buy-in’ of business is essential. Being carbon neutral is our common goal. Each and everyone will have to contribute, as nobody nor any company can be carbon neutral by itself.

While our results may seem disappointing, they draw attention to what needs to change and how businesses can improve. For instance, businesses need to introduce more training on carbon neutrality, the public sector needs to introduce more regulation and financing to support the ecological transition, and leaders have to consider adjusting their business models to make carbon neutrality a realistic outcome.

This is a marathon not a sprint and we hope our findings help business leaders take the necessary next step.

You can find all the survey results and read the full report here: “Les dirigeants d’entreprises face à la neutralité carbone: au-delà de la volonté, quelle réalité?”