This lack of action is compounded by the fact that less than one in five companies have an overarching decarbonisation roadmap or strategy in place.

Lisa Zembrodt, principal and senior director of Schneider Electric’s sustainability consulting business, says the survey results demonstrate a significant gap between businesses that support the energy transition in theory and those taking concrete steps to achieve it.

“Most businesses see sustainability as offering a competitive advantage, but many don’t grasp the urgency of climate action,” says Zembrodt.

“With new climate-related financial disclosure regulations rolling out next year, having a roadmap to transition your business to the low-carbon economy will be essential, and companies should urgently develop and implement a net zero plan.”

These upcoming disclosure rules, based on standards set by the International Sustainability Standards Board, will require companies to reveal extensive information on climate-related issues, including governance, strategies, risk management, and targets.

The requirements for the biggest companies are expected to come into force in January 2025 and will be progressively rolled out to smaller organisations.

The survey also highlights that business wants more government support to accelerate the energy transition. Four out of five corporate decision-makers say the government should support the energy transition, and one-third says regulation is the main driver for decarbonisation.

Most respondents (81 per cent) believe that the government should provide financial incentives for sustainable transformation to be viable, up five points from last year (76 per cent).

Time running out

“This year’s survey results point to an ongoing divide between the most progressive companies and those yet to act – but time is running out,” says Zembrodt.

“We need to bridge this divide by sharing knowledge and resources across industries, being clear on expectations, and looking to governments for leadership and support.”

Despite the challenges, the survey reveals that 70 per cent of Australian business leaders agree that sustainable transformation gives them a competitive edge. However, this is down from 76 per cent last year, signalling a normalisation of progress on sustainability. Furthermore, 71 per cent of companies believe the benefits of adopting sustainable technology outweigh the costs.

However, businesses face significant barriers to adopting sustainable solutions.

The top barriers include a lack of financial resources (37 per cent), the perception that it is not seen as urgent by their business (36 per cent), and a lack of government incentives (33 per cent). Additionally, respondents cited basic methods of collecting data as a barrier to monitoring and improving efficiency and sustainability, with two-thirds saying their main source of energy data was bills and spreadsheets, and a similar proportion citing that a lack of data impacted their decision-making.

Zembrodt stresses the importance of immediate action, noting that the tools and technology exist today to improve efficiency and cut emissions, leading to lower energy costs.

“Companies should not wait to establish and act on a decarbonisation plan,” she says. “In an environment of greater transparency, progressive companies are optimising their sustainability and emissions performance, and with that, they’re improving efficiency and are better able to attract capital.”

The survey also highlights a disparity in the management of different types of emissions. While 70 per cent of respondents are discussing their Scope 1, 2, and 3 emissions, only 10 per cent have a strategy in place for managing Scope 3 emissions, which are created up and down an organisation’s value chain.

More than half have not yet assessed climate risks and opportunities or developed a transition plan for their business. Additionally, the opportunity for energy management actions is high, with only 44 per cent of companies actively managing energy volatility.

Despite recent federal government initiatives, including the establishment of a Net Zero Authority and the introduction of climate reporting rules, 54 per cent of respondents believe Australia is falling behind other countries on climate change action, compared to two-thirds of respondents who reported feeling that way in last year’s Index.

UNSW savants show way forward

The University of NSW has significantly reduced its emissions by switching to 100 per cent renewable electricity in 2020.

The university’s focus is now on electrifying campus infrastructure and tackling Scope 3 emissions from suppliers, travel, and investment activities.

UNSW has demonstrated the advantages of a long-term focus on measurement and the use of technology to create a clear baseline of energy consumption and measure progress on an ongoing basis, says Adam De Paoli, senior manager of engineering technology at UNSW’s estate management.

“We take a consistent approach to carbon reduction, and the hard work of a dedicated group of people in the UNSW’s estate management department’s engineering technology, utilities management, sustainability and engineering teams help meet our emission reduction targets,” says De Paoli.

“These teams work tirelessly to digitise, electrify and de-carbonise in support of UNSW’s net zero goal, and it’s satisfying to know when measured against over four hundred industry customers globally, these teams excel.

“With technology partners like Schneider Electric, these people are making a real difference towards a sustainable future.”

Schneider’s Zembrodt says: “As businesses navigate the complexities of the energy transition, the latest Schneider Electric survey underscores the need for increased government support, financial incentives, and a strategic approach to sustainability.”

The full Sustainability Index, 2024 report, which provides detailed insights into the state of corporate decarbonisation efforts in Australia and the next steps needed, can be downloaded from Schneider Electric’s website here.