Most businesses in the Middle East said a funding constraints and a lack of consensus on net-zero emission frameworks were hindering their plans to become carbon neutral by 2050, according to a study by Standard Chartered.
About six in 10 business leaders in the region felt their companies were not adapting fast enough to meet their net-zero emission goals by 2050, the bank's survey titled Zeronomics showed.
Eight in 10 said they were held back by a lack of access to finance and a failure to agree on net-zero definitions and targets.
“Although the Middle East continues to lead in the introduction of sustainability-driven frameworks and innovations, such as the UAE’s Masdar City and the Mohammed bin Rashid Al Maktoum Solar Park, the world’s largest single-site solar park, much is to be done if the region is to realise a sustainable future,” said Mohamed Salama, Standard Chartered’s head of corporate, commercial and institutional banking in the Mena region.
Companies around the world are focused on reducing carbon emissions in line with the Paris Agreement, which aims to lower emissions to well below 2°C above pre-industrial levels.
Senior executives at 250 large companies and 100 investment specialists around the world took part in the study that was conducted between September and October 2020.
The study indicated that carbon-intensive industries and companies in emerging markets were struggling with their energy transition goals.
“Our survey reveals that most companies intend to transition to net zero by 2050 but have yet to take the action needed to get there,” said Bill Winters, group chief executive of Standard Chartered.
“A majority cite funding as an obstacle and carbon-intensive industries and emerging-market companies struggle the most.”
Companies in the Middle East are also looking to delay significant action required to achieve net-zero emission goals to after 2030.
About two in 10 business leaders, compared with 34 per cent globally, said their companies would make the most progress on their zero-emission goals between 2030 and 2040, while four in 10, compared with 37 per cent worldwide, said they expect to make the most progress between 2040 and 2050.
Seven in 10 respondents in the Middle East said a lack of consistent measurement and reporting standards was hampering progress, while an equal number said a lack of supply chain transparency was a significant barrier.
Covid-19 is also forcing many businesses in the region to focus on their immediate survival, with 85 per cent of senior executives saying that the pandemic had delayed their company’s net-zero transition.
A further 85 per cent, compared with 81 per cent globally, said cost savings from sustainable practices could “help the world hit net zero by 2050”.
Meanwhile, 72 per cent of respondents in the Middle East and around the world believe stronger external incentives such as favourable tax treatment would help with the transition, according to the survey.