Over half (52 per cent) of Australian business leaders believe that a sustainability skills shortage is holding back their organisation’s energy transition, according to new research.
The survey of more than 500 business managers and decision-makers across corporate Australia found that 76 per cent of businesses saw sustainable transformation as providing a competitive edge. However, it also highlighted that the majority are struggling with a lack of energy transition expertise and dedicated personnel to get their strategies in place.
The concerning findings are part of the new Sustainability Index: transforming intention to outcomes report from Schneider Electric, the global leader in digital transformation of energy management.
“Corporate Australia is committed to energy transition, but our research shows that without proper support and intelligence, a significant proportion are struggling to make an impact on their emissions,” Schneider Electric’s Pacific Zone president Gareth O’Reilly said.
Over a tenth (14 per cent) of business leaders admitted they don’t know where to start in setting carbon emissions reduction targets. A similar number (12 per cent) were also unsure how to create an energy usage data capture and reporting strategy to understand their current emissions.
The findings may explain why only 14 per cent of respondents said their companies had developed and published a climate action plan internally. As well as why, only 11 per cent had publicly shared an intention to reduce their carbon emissions and just 7 per cent had announced any commitment to reach net zero.
“Energy transition is inevitable for all businesses, what we need now is quick and effective outcomes. Key to this will be helping businesses understand their emissions and what to do to reduce them,” O’Reilly said.
Currently carbon emissions are measured across three scopes. The first (Scope 1) covers emissions from a company’s owned or controlled resources. The second (Scope 2) are those generated from purchased energy, such as gas and electricity. Finally, Scope 3 emissions are created indirectly through a business’ value chain by third parties, such as its suppliers and end users.
The data shows that anywhere between a quarter to a third of business leaders are struggling to understand their emissions across these scopes:
- Scope 1 & 2:
- Natural gas (25 per cent)
- Refrigerants (25 per cent)
- Transport fuels (26 per cent)
- Other liquid fuels (30 per cent)
- Electricity (14 per cent)
- Scope 3:
- Upstream leased assets (33 per cent)
- Employee commuting (26 per cent)
- Capital goods (24 per cent)
- Business travel (21 per cent)
- Franchises (35 per cent)
- Investments (25 per cent)
“When you consider the breadth of carbon emissions a company can contribute to, it’s clear that expert skills are essential to effective energy transition,” O’Reilly said. “Encouragingly, businesses are identifying the quickest way to gain the expertise they need is through third parties.”
More than a third (38 per cent) of organisations confirmed that they are receiving external partner support in decarbonising. This included over half (55 per cent) of Australia’s large companies with 200+ employees, almost half (48 per cent) of medium-sized companies and 29 per cent of small businesses with less than 20 employees.
Companies that engaged third-party experts were more likely to have implemented energy management systems (41 per cent), IOT assets (40 per cent) and specific software (35 per cent). While companies which hadn’t gained assistance have lower levels of adoption (24 per cent, 17 per cent and 18 per cent respectively).
Large companies were also most likely to have either identified their material risks and started to develop an action plan (35 per cent), or to have already published one (23 per cent).
“It’s make or break time for businesses to address energy transition and sustainability skills will be a leading determinant in those that get ahead and those that fall behind,” O’Reilly said. “Businesses must secure their access to the decarbonisation expertise now, or potentially fall through the sustainability skills gap on the road to net zero.”
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