Net Zero Emissions Plans in Place, but Transition Must be Accelerated
Jakarta, 16 Oktober 2023 – Zurich Indonesia has published a Sustainability Executives Survey conducted in 15 countries, gathering responses from almost 700 executive officials regarding what is driving their current and planned strategies by companies regarding climate change mitigation and adaptation. The survey has shown that companies across sectors and around the globe are committed to net-zero and are already pushing ahead with the delivery of transition plans in the short-term, however challenges remain to accelerate this and both public and private sectors must play a role.
Across the six sectors, at a global level, the survey found that financial institutions and energy companies are most likely to have net-zero plans in place (88% and 85% respectively). These sectors are pivotal to facilitating wider mitigation action and have been the focus of public policy activity. The heavy manufacturing, consumer goods and agriculture sectors are not far behind at just under 80%. The outlier was the transport sector, where only 37% stated that they have some plan prepared.
In Indonesia specifically, it was found that companies are showing a strong commitment to climate change, with 100% of respondents noting that a transition plan was already in place, and 97% having already set targets to reduce carbon emissions to net-zero - this is mainly being driven by the advocacy of investors and the drive for business advantage.
Budi Darmawan, Sustainability Country Lead for Zurich in Indonesia, stated, "In line with our purpose of creating a brighter future together, we conducted this research to provide important insights on how a diverse group of companies across geographies and sectors are approaching the climate transition, where they are making progress, where they see challenges, and how to accelerate the transition to net-zero. We see climate change as one of the most complex risks of our time, as it is a cross-country, cross-generational, and interdependent issue with impacts extending across all industrial sectors."
As well as highlighting areas where positive momentum is already building, the survey also picked up on a number of key challenges. Globally, the most important barrier to developing a net-zero plan – named by 50% of companies overall – were costs and scale of capital expenditure. This was closely followed by three related roadblocks: lack of feasible technological solutions; regulatory challenges; and difficulties in measuring and monitoring impact.
In line with global feedback, the key challenges to further developing plans in Indonesia were also a lack of feasible technology solutions and the cost and scale of expenditure; however, lack of available skills was also cited as one of the top three challenges by sustainability executives in Indonesia. The insurance industry was also seen to be able to support companies in their net-zero transition measures, with 77% of Indonesian executives asking for their support with policies and 67% for assistance with risk management.
The report concludes that more investment support and incentives are needed to help companies both large and small bear the costs of investing in technologies to meet their ambitions such as to switch to renewables, electrify fleets, update buildings to be energy efficient and to support data capture and measurement. These scalable and rapidly applicable innovations require collaboration across industry players, as well as public-private collaboration in research and funding. The authors suggest that a combination of financial incentives and government mandates will be the most effective for scaling these technologies and recommend three priorities for action: to creating policy certainty; to unlocking finance and create economic initiatives; and to turbo-charge innovation.
"Climate change is an issue that requires urgent action and strong collaboration. With our commitment to provide leadership in overcoming climate change, Zurich will continue to actively play a role in finding solutions and collaborating with business players and our communities to drive a meaningful impact," concludes Budi.
To garner further attention and support from business leaders and opinion leaders, Zurich will echo the research findings at Conference of the Parties on Climate Change (COP 28) in Dubai from November 30 to December 23, 2023. The research results can be accessed at www.zurich.com.
The survey was carried out in April and May 2023 668 businesses in North America (Canada, United States); Latin America (Brazil, Mexico); Europe, the Middle East and Africa (France, Germany, South Africa, Spain, Switzerland, UK, UAE); and Asia-Pacific (Australia, China, Indonesia).
The respondents were in companies with annual revenue of over USD100 million and of senior and executive level who have responsibilities related to sustainability within their company. They represent six sectors (agriculture; consumer goods; energy, oil and gas; financial services; heavy manufacturing; and transport)