Australia is navigating a delicate balance between economic recovery and its commitment to net zero, as global uncertainties, supply chain disruptions, and climate risks reshape the landscape.
Manish Pant, head of international operations at Schneider Electric, says Australian industry must act decisively to accelerate decarbonisation through digitalisation and electrification.
Australia is one of the few economies that has achieved economic growth while reducing carbon emissions. iStock
Pant, in Sydney to address corporate leaders at Schneider Electric’s bi-annual Innovation Summit, says Australia is uniquely positioned to lead the world in sustainable economic growth.
“Australia is at a pivotal juncture in rebuilding its economy and resilience through the transition to a renewable economy,” he says. “It is one of the few economies that has achieved economic growth while reducing carbon emissions, proving it is possible to decouple prosperity from fossil fuel reliance.”
With more than 39.4 per cent of the nation’s electricity now coming from renewable sources, Pant says businesses must increase investment in grid digitalisation and industrial automation to help achieve Australia’s renewable energy ambitions by 2030.
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He points to recent economic pressures, including pandemic-related supply chain disruptions and geopolitical tensions, which accounted for up to three-quarters of Australia’s inflation spike. He warns that while global decoupling is a challenge, it also presents an opportunity.
“Decoupling from global supply chains could drive local innovation and investment, as we’ve seen in semiconductors and critical electronic components,” he says. “At the same time, Australia’s rising population will increase energy demand, making it even more urgent to cut carbon emissions.”
Manish Pant, head of international operations at Schneider Electric.
Australia’s renewable energy potential provides a solid foundation for the transition, Pant says, with the ability to decarbonise the electricity system, electrify transport and industry, and develop new green export industries.
“Government incentives supporting upskilling for electricians and energy management professionals offer an added boost to this transition,” he says. “There has never been a better time for businesses to seize the opportunity.”
Despite this momentum, significant challenges remain. At COP28 in Dubai, Australia was among 120 countries that pledged to double energy efficiency by 2030. Yet, while the number of companies globally setting science-based targets has increased ninefold in five years, surveys indicate just 10 per cent are delivering on them.
A study from Climate Impact Partners found that as of November 2024, 45 per cent of Fortune 500 companies had set net-zero targets - an increase of six points from the previous year. Yet last year’s Schneider Electric Sustainability Index revealed that nearly 40 per cent of Australian companies are not taking action to decarbonise, and one in four has no intention of reaching net zero by 2050. Additionally, less than one in five has a clear decarbonisation roadmap.
However, businesses are increasing investment in digitalisation, AI, and data analytics to meet their sustainability goals. The Sustainability Index found that 53 per cent of companies Down Under are ramping up digital transformation efforts, with 39 per cent focusing on automation and 36 per cent on renewable energy. Meanwhile, 46 per cent are investing more in AI and analytics, while only 5 per cent are investing less than three years ago.
Pant urges Australian businesses to take action now, leveraging available technology to make meaningful progress on emissions reduction.
“Existing technologies can already eliminate 70 per cent of carbon emissions,” he says. “Australia has long been a leader in software innovation and cloud computing. Companies can capitalise on this to accelerate AI adoption, electrification, and digitalisation, setting a global benchmark.”
The role of digitalisation and AI
AI presents a particularly promising avenue for energy management, he says, allowing businesses to track and optimise energy use in real time and predict potential risks.
“There are two key aspects to emissions reduction,” he says. “The supply side, which focuses on the transition to renewables, and the demand side - how we use energy more efficiently. It’s about making it better for both the wallet and the planet.”
Data-driven decision-making is critical, Pant says. Without real-time insights, businesses lack visibility into what drives their emissions. Having access to live data and analysis allows companies to identify inefficiencies, respond to emerging risks, and increase sustainability.
“Digital twins, monitoring systems, and automation are some of the fastest ways to understand and cut emissions,” he says. “Australia’s renewable resources provide a strong foundation for electrification and the development of new green commodities for export.”
Prashant Murthy, chief financial and commercial officer at hyperscale data centre operator AirTrunk, echoes these sentiments, saying businesses have a responsibility to drive decarbonisation.
“As one of the leading data centre digital infrastructure players in the Asia-Pacific region, we have a responsibility to build scalable, future-proof facilities to support the rapid growth of AI and digital transformation while adopting innovative approaches to sustainability,” he says.
“From managing embodied carbon, water, and waste to increasing renewable energy use in our operations, we are working to ensure our data centres contribute to a more sustainable future.
“Achieving sustainable growth can’t be done in isolation, we collaborate with our ecosystem of partners to achieve our shared ambition. This includes companies such as Schneider Electric who we’re working closely with on energy management and reducing embodied carbon.”
Schneider Electric’s Pant says the window for action is closing and businesses that move early will gain a competitive edge.
“The timing is right,” he says. “The intent is there. Now it’s about execution.”
Pant stresses that Australia’s unique vulnerabilities to climate change make emissions reduction not just a corporate priority but a national imperative. With 80 per cent of the population living in coastal regions, the risks of rising sea levels and extreme weather events are intensifying.
“This isn’t a distant problem - it’s happening now,” he says. “Australia is already seeing more extreme heat, floods, and storms. The longer we delay action, the greater the risks to infrastructure, supply chains, and economic stability.”
At the same time, Australia’s rising population and the need for over 1 million new homes by 2030 will significantly increase energy demand. Without urgent investment in energy efficiency, renewable integration, and grid modernisation, Pant warns, the nation could fall short of its 82 per cent renewable energy target for the decade.
“The scale of construction required is massive,” he says. “It’s not just about building homes - it’s about building them sustainably. Every new development must be designed with energy efficiency, electrification, and digitalisation at its core.”
Furthermore, most grids today are unidirectional and decades old, making them inefficient and unprepared for the energy transition. Therefore, investing in digitalisation and grid flexibility must be at the centre of energy transition efforts.
The economic argument for action is compelling. Research by the World Economic Forum suggests that transforming energy demand could unlock up to $2 trillion in annual savings by 2030. Meanwhile, Australia’s commitment to a 43 per cent emissions reduction from 2005 levels is only partially met, with a 28.2 per cent reduction achieved as of early 2024.
“This means Australia has to accelerate its efforts over the next five years,” Pant says. “We’re on the path, but the pace must pick up dramatically.”
Businesses are driving the transition
Businesses, he adds, are already stepping up, with companies worldwide maintaining ambitious climate targets despite economic uncertainty and ESG backlash. In North America, 79 per cent of firms have a significant climate commitment by 2050, while in Asia, the figure has risen to 46 per cent. Europe, already ahead, has seen no further growth.
Investment in renewables continues at pace, with an additional $9 billion in projects reaching financial close in 2024, adding 4.3 GW of large-scale capacity and creating over 10,000 new jobs. However, Pant says much more is needed to reach Australia’s targets.
“The renewable energy sector is making great strides, but we need a holistic approach that includes demand-side efficiencies,” he says. “Businesses must focus on digitalisation, automation, and AI-driven energy management to cut waste and maximise renewables.”
Beyond corporate action, Pant points to the need for stronger government incentives to support businesses in their transition.
The Sustainability Index found that while many organisations want to do more, policy uncertainty and a lack of financial support remain key barriers.
“The government has a role to play in accelerating progress,” he says. “Clearer policy frameworks and financial mechanisms can help businesses invest confidently in sustainability initiatives.”
As Australia approaches a critical juncture, Pant sees an opportunity to lead on the world stage. With its strong renewable resources, expertise in AI and automation, and increasing corporate commitments, the country has the potential to set a global benchmark for sustainable economic growth.
“Other nations are watching,” he says. “Australia has the chance to prove that decarbonisation and economic prosperity can go hand in hand. But success depends on decisive action today.”
For businesses, the message is clear: those that embrace sustainability now will be best positioned for future growth. “This is no longer just about compliance - it’s about competitiveness, resilience, and leadership,” Pant says. “The future is being shaped today.”
