European businesses set to miss emissions targets
New research from Centrica Business Solutions has revealed the mounting task European businesses face in meeting their 2030 climate commitments. The organisation undertook a poll of 500 European companies, with these representing a range of energy-intensive sectors, including manufacturing, healthcare, hospitality, and travel & tourism[i].
The study found that a third of businesses have no clearly defined path to net zero and are likely to miss their 2030 emissions targets. In addition, almost a fifth of respondents (17%) said that their emissions reduction strategy is below expectations. When asked to state their biggest barriers in achieving net zero, 36% said that their sustainability goals are not aligned with business objectives, and more than a quarter (28%) said that their energy transition strategy is vague[ii].
Energy resilience is key
The research identified energy security and resilience as the leading threat for companies, with 44% of respondents saying it poses a substantial risk to their organisation. Financial risk was identified as a key concern for 43% of respondents, while market risk was cited by 36% - reflecting ongoing uncertainty about the current macroeconomic landscape.
Subsequently, companies are becoming more cautious, the research claims. Almost a third (30%) of organisations say that, while they meet their environmental targets, a reliable energy supply is their overriding priority, up from just 17% in 2021. Centrica notes that energy-related challenges are not likely to subside any time soon, with the International Energy Agency (IEA) stating that electricity consumption is set to soar through to 2027.
Centrica suggests that energy control is now a fundamental piece of the net zero puzzle, where those companies with greater control of their energy supply are better positioned to keep sustainability plans moving forward. Likewise, more vulnerable businesses are struggling to overcome short-term hurdles and access long-term opportunities.
Barriers to net zero
Looking specifically at the barriers companies face in reaching net zero, Centrica’s research finds that budget constraints come out on top, with 46% of businesses saying it is one of their biggest obstacles. This figure rises to 63% for energy vulnerable organisations, further highlighting the importance of addressing investment uncertainty to build resilience.
However, energy resilient organisations are also feeling the pressure. As many as 60% of survey respondents cited supplier or infrastructure limitations (such as grid capacity constraints) as a key obstacle to reaching net zero. This not only highlights the need for energy independence but also hints at a longer-term trend across Europe as businesses look to more advanced technology-driven methods to shore up supply while advancing the sustainability agenda.
Lastly, the researchers highlight that energy choices are becoming more complicated, with many of the “quick wins” already made and low hanging fruit picked. Instead, businesses are being forced to redefine their way forward in an ever-changing energy labyrinth[iii].
References
[i] Are businesses falling short of 2030’s sustainability targets? | Centrica Business Solutions
[ii] Centrica - Navigating the Energy Labyrinth (Digital) - UKI.pdf
[iii] Are businesses falling short of 2030’s sustainability targets? | Centrica Business Solutions
