Overview
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Environmental sustainability is not just a matter of corporate responsibility but a business opportunity with bottom-line benefits.
Overview
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Companies are overlooking electrification, a powerful vector of decarbonization.
Overview
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74% of companies that outsource sustainability programs prefer to integrate strategy, implementation, and digitization.
Overview
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companies have emissions-reduction targets approved by the Science Based Targets initiative.
The corporate world is ready to move toward net-zero carbon emissions
Recent carbon-reduction policies and heightened standards on climate disclosure are encouraging companies to address climate risk and protect their long-term business value.
Companies are pursuing various approaches to accelerate progress
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Challenges
Geopolitical tensions, macroeconomic issues, and fluctuations in the prices of energy and raw materials may be changing how companies and industries act.
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Strategies
Companies can best position themselves to deliver on their commitments by defining clear KPIs and interim targets, using digital systems to capture how energy and resources are used, and consistently tracking and reporting on emissions and carbon data.
Companies (finally) recognize business benefits of sustainability
While 31% of companies cite regulatory pressure and 24% cite climate-related risk as key drivers for decarbonization, there has been a significant increase in companies citing opportunities for savings as a priority
How willing are companies to spend?
On average, companies surveyed in 2023 plan to spend 2% of their revenue annually on sustainability initiatives over the next three years. That is very much in line with the 1.9% recorded in the 2022 study.
There are also interesting differences between business sectors
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Higher Investments
Companies in the commercial buildings and real estate space, healthcare, and the water and wastewater arena are planning significantly higher investments.
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Reduced Investments
Cloud and service providers, along with companies in the data center, energy, life sciences, and logistics sectors, are reducing investment plans.
A noteworthy juxtaposition
In other words, even though sustainability is increasingly becoming an immediate priority for companies, there seems to be a limit to the amount being spent.
This may be explained by the geopolitical and economic turbulence and energy price fluctuations associated with the war in Ukraine, alongside soaring inflation and interest rates, all of which hit business and investor confidence around the globe in 2022 and 2023.
The biggest opportunity
The potential of electrification remains largely unexplored
While the most well-known example of electrification is today’s rapid transition to electric vehicles, the emission-reduction benefits of adopting more electrically powered technologies for heating and industrial processes can be equally as impactful.
What barriers must companies overcome?
Companies struggle to cut emissions, adopt technology, and navigate regulations.
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Achieving set targets (10%)
Business leaders highlighted the complexities and pressure they face in building a strategic, customized plan to reduce carbon emissions and meet targets.
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Managing new technologies (9%)
Companies are struggling to secure the finances and resources to change how things are done, while also investing in technology and skills to support the transition.
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Navigating changing regulations (9%)
The ever-evolving landscape of regulations is a major hurdle in certain countries, where survey respondents shared concerns about new and complex government policies.
Different parts of the world face different challenges
Are companies leveraging the right skills and expertise to succeed?
For just over a quarter (27%) of company leaders, budgetary constraints are an important reason for developing sustainability programs in-house. Conversely, roughly the same percentage of respondents (26%) cite budget as the main reason for outsourcing their sustainability programs.
Companies are working to decarbonize
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Top Priority
The executives questioned in our survey confirm that decarbonization is the most important aspect of environmental sustainability, and that tackling their carbon emissions is their number one priority.
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Opportunity
While sorting out their priorities and sticking to a robust carbon reduction plan seems to be the biggest challenge – if addressed effectively, it’s also the biggest opportunity. By developing and sticking to a clear sustainability strategy that delivers decarbonization, organizations stand to see financial and operational benefits, too.
Driving a sustainable future
Schneider’s Electricity 4.0 vision helps businesses and corporations tackle sustainability challenges with products, systems, and software for electrification, power management, and enterprise automation to:
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Improve operational efficiency
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Reduce fossil fuel dependency
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Deliver cost savings
The findings cited above are from a double-blind study of 4,085 key corporate decision-makers and their direct reports from a wide range of companies, sectors, and countries. Conducted in the first half of 2023, this research, commissioned by Schneider Electric, was carried out by GfK, a NIQ company, with the support of Beresford Research, USA.
This 2023 research builds on Schneider Electric’s C-level pulse check on attitudes to corporate sustainability from 2022 conducted by Beresford Research, USA. The 2023 survey gathered insights from an expanded sample of C-level business leaders, with 4,085 surveyed, seven times more than in 2022.
