The heaviest-emitting sectors—energy, industrials, transport, and agriculture among them—have been critical leaders in the cross-industry effort to become more sustainable.
Corporations, governments, and individuals are taking action to avoid further warming. Brands are increasingly climate positive, removing more carbon from the atmosphere than they emit.
Efforts aimed at improving biodiversity and water security—and decreasing pollution and food waste—have also gained broad support and sufficient funding to make a positive impact.
The first takes courage—a willingness to look beyond short-term pressures to confront an even greater problem. The second takes resources—the knowledge and institutional backing required to make actual progress. But companies also face some practical obstacles to closing the climate action gap:
Few companies have a comprehensive understanding of their greenhouse-gas output—or the impact of those emissions.
Just 9% of companies measure their total emissions comprehensively; 81% omit some of their Scope 1 and 2 emissions, and 66% do not report any of their Scope 3 emissions. What’s more, companies estimate an average error rate of 30% to 40% in the measurements they do make. Without understanding the full extent and composition of their total emissions, companies won’t know where to prioritize their reduction efforts—or how to measure their progress accurately.
The science on climate change continues to evolve. Companies must continuously adapt their responses as a result.
While limiting the temperature increase to “well below 2°C” was considered a reasonable goal a few years ago, the latest research suggests that every additional fraction of a degree has a profound impact. As the rate of actual temperature increase and the pace of emission reductions change, abatement targets and pathways may need to change with them. Given these circumstances, making commitments—and setting the targets to meet them—is a significant challenge.
Companies can’t deliver meaningful results without establishing clear accountability for sustainability goals and initiatives.
Since net-zero goals often require considerable cross-functional coordination to achieve, confusion over which part of an organization is responsible for which activities can create overlapping remits and slow down progress. The result? Confused execution and duplication of resources.
Sustainability efforts vary widely across different regions, as do laws and regulations related to climate.
Companies with operations and supply chains in regions that have yet to take aggressive climate action may struggle to find support for their emissions-reduction efforts from governments or citizens. Meanwhile, regions that are leading on climate efforts are finding it difficult to translate their ambitions into policies—and companies operating in these locations are uncertain whether moving quickly to slash emissions could generate a competitive disadvantage.
Deployment comes with some significant obstacles, including uncertainty about projected costs and effectiveness.
Reaching longer-term targets, particularly those in high-emitting sectors, will require new technologies. Moreover, current assets in these sectors have long lifespans and high capital expenditures—making it likely that companies that adopt new technologies will incur major losses if they need to decommission legacy assets earlier than planned. Without the right regulations, policies, and investments, there is a risk that abatement progress stalls in heavy-emitting sectors after the easy-to-abate emissions have been eliminated.