ENGIE Impact 2023 Net Zero Report-1

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Tuesday, March 22

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Decarbonization Momentum Falters with Corporate Implementation Challenges

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2023 Net Zero Report

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Organizations need to keep their energy up as they begin to face more significant barriers to decarbonization implementation. Here’s why.

53%

12%

75%

More than half describe their progress in executing their current sustainability program as either ‘moderately successful’, ‘slightly successful’ or ‘not at all successful’.

Moderate success so far

Few exceeding expectations

Harder challenges ahead

12%

Only 12% believe they are on track to meet or exceed their ambitious decarbonization goals.

75%

75% of respondents say they have achieved most of the ‘quick wins’ in their decarbonization plan and have now switched focus to tackle the harder to address challenges.

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Maintain Long-term Focus and Belief

Now is the time for organizations to double-down on their decarbonization resource allocation to turn short-term volatility into long-term competitive advantage. Strong leadership is required to disrupt the cycle of short-termism when measuring ROI on decarbonization investment. It is a mistake to cut funding to decarbonization at the very moment when the momentum for change is building.

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Establish Governance and Accountability

Our research reveals that organizations are taking different approaches to building their internal decarbonization capabilities. While there may be no single right approach, our survey shows that leading organizations are empowering local or functional decision-makers to embrace high impact decarbonization solutions. It is essential to think through which organizational model will deliver maximum return on decarbonization investments.

Close the Implementation Expectation Gap

Our survey highlights a misalignment between the views and expectations of senior executives compared with those responsible for implementing decarbonization initiatives. This gap threatens to derail future progress. Successful organizations have realigned their executive vision with their operational know-how to unlock their decarbonization firepower.

Increase Executive Accountability

As decarbonization goals becomes mainstream, the risk of making empty promises and limited corporate follow-through increases. To avoid accusations of greenwashing it is vital that executives are held accountable for the success of their organization’s decarbonization activities. Carbon reduction commitments need to be treated as seriously as financial targets.

Activate the Right Decarbonization Enablers

Executives need to make sure they are using all enablers at their disposal to accelerate decarbonization impact. Our research reveals three levers will become increasingly important between now and 2025: innovative finance models, carbon pricing, and investing in decarbonization data maturity.

Collaborate with Supply Chains

The most successful decarbonization leaders recognize they cannot achieve long-term carbon reduction on their own. Their organization needs to partner closely with its supply chain to address its Scope 3 carbon emissions. In practice this means implementing shared incentives and joint interest initiatives, alongside utilizing procurement leverage to spur suppliers into action.

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The collective experience of the 505 organizational leaders in our 2023 Net Zero Report drills down on the most significant implementation barriers organizations are facing, and the approaches they are taking to overcome these challenges. We find that now more than ever it is vital for organizations to double-down on their decarbonization investments and to use the levers at their disposal to accelerate their impact.

6 Key Actions to Accelerate Decarbonization Efforts

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73%

describe the pressure to deliver short-term return on investment as either ‘a major barrier’ or ‘somewhat a barrier’ for their organization.

69%

A majority of organizations in our research believe that having superior sustainability capabilities will drive their competitive advantage either ‘to a considerable extent’ or ‘to a large extent’.

The company’s inertia in terms of sustainability is in conflict with the rapid realization of the solutions envisaged.

Executive leaders tend to be more optimistic than operational roles

11%

41%

39%

34%

12%

17%

We are far behind our industry

We are slightly behind our industry

We are at par with our industry

We are slightly ahead of our industry

We are far ahead of our industry

Operational leaders

Executive decision-makers

69%

Nearly seven in ten of the organizations in ENGIE Impact’s survey say the lack of incentive or ownership at executive level to drive decarbonization initiatives is a barrier to decarbonization progress.

Investment criteria

Innovative financing

Carbon Pricing

44%

33%

11%

34%

31%

18%

11%

32%

35%

18%

In place now

Will implement by 2025

Will implement after 2025

No plans to implement

Don’t know

More organizations are considering more innovative levers

have incorporated decarbonization commitments into formal procurement contracts within their supply chain. A further 38% anticipating doing so by 2025.

38%

French retail company survey respondent

From strategy to implementation—we help you with every step of your decarbonization journey.

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Download the 2023 Report

From strategy to implementation — we help you with every step of your decarbonization journey.

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