World Economic Forum 08/01/2022
The The World Economic Forum has published a first edition of a report on the state of the transition to net zero in key industrial sectors, the Net-Zero Industry Tracker 2022. The report highlights the need to fully understand the scope and magnitude of the challenge for these sectors. and identifies a significant gap in the pace of decarbonization needed to achieve net zero emissions targets to limit global warming to 1.5°C by 2050. The urgency of industrial decarbonization is heightened by high prices energy and disruptions in the energy supply chain.
Participants of the World Economic Forum Global Technology Governance Retreat. June 2022
This initiative, launched by the World Economic Forum in collaboration with Accenture, establishes a common and evidence-based understanding of the net zero transformation of the industrial sector, enabling cross-industry and multi-stakeholder collaboration. The report presents a holistic framework for a 360-degree perspective and standard metrics needed to measure progress, along with key recommendations for industrial companies, policymakers, consumers and other stakeholders.
Tracking progress and transparency are key to helping industries chart their decarbonization trajectory, maintain steady progress, and inform necessary course corrections along the way.
“While efforts are underway and climate commitments are being made, we currently lack a robust and comprehensive mechanism to understand the pace and direction of progress in the transformation of heavy industries, which account for 30% of global carbon emissions. greenhouse gases,” said Roberto Bocca, Head of Energy, Materials and Infrastructure, World Economic Forum. “Several industry sectors and individual companies have set targets with the goal of achieving net zero emissions. We believe that bringing transparency to closing net zero gaps and reporting on this progress is essential to achieving these ambitious goals.
The report provides qualitative and quantitative metrics to track changes in key enabling dimensions such as technology maturity, access to enabling infrastructure, supporting policy frameworks, demand for low-emission products and availability of capital for investments in low-emission assets. It assesses the state of these enablers, which must advance simultaneously, and highlights sector-specific accelerators and priorities across five heavy industries – steel, cement, aluminum, ammonia, and oil and gas. gases, which together generate 80% of industrial emissions, according to Accenture analysis.
Given the cross-sectoral nature of the barriers and priorities for net-zero industrial transformation, innovative forms of partnership within and between sectors, and with other stakeholders, will be fundamental to meeting the challenge. Other measures include consensus on the definition of “low-emitting” industrial products and processes, robust and stable green demand signals, and risk-sharing mechanisms to attract the capital needed to develop technologies and infrastructure.
The report points out that more than $2 trillion will be needed to make low-emission industries a reality and that the first large-scale commercial projects still carry significant risks in which companies can invest.
Espen Mehlum, Head of Energy, Materials and Infrastructure Benchmarking Programs, World Economic Forum, said: “Investments in low-emission assets are riskier for companies due to their reliance on new technologies and infrastructure. Collaboration will be at the heart of ensuring that the enablers of policy, fuel demand, technology, capital and infrastructure are all pulling in the same direction to accelerate progress towards climate goals.
Muqsit Ashraf, Senior Managing Director and Global Head of Energy Industry, Accenture, said: “Accelerating the transformation of industries, and particularly hard-to-reduce industries such as cement and steel, is key to realizing net zero ambitions. Moreover, in the current environment of high energy and material prices, reducing the energy intensity of industries will also become a source of competitive advantage. In addition to innovation, regulation and investment, the Net-Zero Industry Tracker will become an essential tool in bringing transparency to the decarbonization and energy efficiency journey.
The report stresses that concerted efforts should also include policymakers, financial institutions and consumers.
“Companies are at a sustainability inflection point, where embedding sustainability by design deep into their businesses is no longer an option,” said Kathleen O’Reilly, Global Head, Accenture Strategy. “To lead right now, companies need to focus on multi-stakeholder collaborations — for example, helping customers reshape demand, partnering with industry peers to reduce technology costs, and building shared infrastructure and working with policymakers on regulations to create differentiated markets for low-emission products.