A new research from Standard Chartered has unveiled that more than 50% of African companies are delaying their energy transition targets. This delay has left them in danger of missing the Paris Agreement target of net zero carbon emissions by 2050.

The study, dubbed Zeronomics, surveyed the senior leadership of 250 large companies and 100 investment specialists around the world between September and October 2020.

The research found that

  • 55% of Africa-based business leaders believe their companies are not transitioning fast enough (55% of companies globally).
  • Lack of access to finance is the biggest barrier to progress for African companies, cited as a significant obstacle by 78% (67% globally).
  • Just 35% of African companies fully support the aims of the Paris Agreement (47% globally).

Many companies in Africa are looking to delay significant action up to after 2030. Some 32% of business leaders (34% globally) said their companies will make the most progress between 2030 and 2040. A further 40% (37% globally) said they will take most action between 2040 and 2050.

Most companies sited delay in transition because they do not feel they are currently equipped to meet the target. Some 78% (59% globally) said they need extensive organizational change before tackling the target.

72% (63% globally) believe a lack of consensus on net zero definitions and targets is hampering progress. The same percentage (60% globally), site lack of support for the transition from their organization’s investors is a significant barrier to net zero.

Additionally, the research revealed what business leaders believe is needed in order to speed up transition. 90% (77% globally) believe an effective global carbon tax, based on a carbon price that reflects the true cost of climate change, would help transition.

A further 88% (81% globally) said cost savings from sustainable practices could help the world hit net zero by 2050. Meanwhile, the same percentage (81% globally) believe standardized net-zero measurement frameworks would help with transition.

Top accelerators of net-zero transition Africa (%) Globally (%)
An effective global carbon tax 90 77
Standardised global net zero transition measurement, disclosure and ratings frameworks 88 81
Increased operational efficiency / cost savings from sustainable practices 88 81
Increased shareholder activism / investor scrutiny and pressure 82 78
Increased investor demand for net-zero transition themed assets 82 72
Inclusion of net zero transition as a key part of investors fiduciary duties 80 74

Bill Winters, Group Chief Executive of Standard Chartered said, “A successful net-zero transition must be just, leaving no nation, region or community behind and, despite the hurdles, action needs to be swift. We must act now, and we must act together: companies, consumers, governments, regulators and the finance industry must collaborate to develop sustainable solutions, technologies and infrastructure.”

Sarmad Lone, Regional Head, Client Coverage Corporate, Commercial and Institutional Banking Africa and Middle East, Standard Chartered Bank added, “Our survey reveals that there is significant opportunity in Africa to pave the way for zero-net carbon emissions. Our biggest challenge, and what should be a priority for us as companies, is to reach a consensus on net zero definitions and how the transition should be implemented across the region.”

Reaching net zero carbon emissions by 2050 has been seen as a considerable challenge. Every organization in every sector has a critical role to play in limiting global warming. To succeed they must undergo major transformation.