Net zero vs reality: Bridging the chasm for Australian businesses

Given the energy crisis in Australia — with soaring prices and supply issues, putting pressure on businesses and consumers — the need to revisit net zero goals is on the government agenda, but will it go far enough to drive real action?

Energy Action surveyed 69 businesses last quarter, with revenues between $2 million and greater than $200 million, to understand their sentiment around net zero.

The disparity between Australian businesses knowing they need to devise and action net zero plans and the reality of achieving those goals is huge, according to the survey.

The survey found that while 88% of the businesses’ employees knew that action was needed to plan for net zero, only three of out of 10 management/board members considered it a high priority. And even more alarmingly, only 18% of these businesses had set net zero goals.

Of the businesses surveyed, most are attempting to achieve net zero before 2030. However, confidence within the organisation of achieving their target date is low with only 7% believing they could easily meet the mark.

Energy Action’s survey results have also been mirrored by a recent KPMG report showing only 39% of leaders believe they will have implemented the operational changes required to meet their ESG targets by 2030.

It’s evident from all the survey results that businesses need more guidance and policy on these matters which has not yet come, nor should we expect this any time soon, and as a result businesses are not being pushed by their competitors to get to net zero.

While the Labor government moves to increase emissions reduction targets to 43% by 2030, and we have also seen a national meeting of energy ministers, it’s becoming clear that despite their best intentions, there is no government reprieve or real solutions being put forward.

As a result, businesses will start to close their doors if they can no longer manage the high price of energy, along with rising inflation. It will be up to businesses to start being resourceful and finding their way to reduce their energy costs.

Energy prices are going to be high in the medium term, and companies need to have the discussion and choose whether they want to be a victim or be proactive.

The good news is that while the energy crisis and high energy prices are creating immediacy, driving businesses to desperately review and cut down their costs — these steps are essentially the first steps on their journey to net zero.

These are the three key levers to consider:

Measure

Businesses need to review their current situation and energy needs. This is the first and one of the most important steps to take on the net zero journey. This involves compiling energy and emissions data across all sites associated with a business to set a benchmark. Once a benchmark is set, measuring emissions becomes a constant to ensure emissions and costs continue to be driven down.

Reduce usage

Once you’ve benchmarked your usage, it’s time to reduce. To do this, businesses will need to make use of the various types of cost-effective energy-saving equipment available to lower emissions and costs of operation to suit the business best. This process may seem complex at first, but there are energy monitoring platforms available to keep all this information readily available on one portal.

Procurement

Businesses can drive down cost through a competitive procurement process. Choosing the right procurement method for your business will depend on the size of your business. The different methods for renewable energy procurement include installation of onsite solar, which can lead to significant long-term savings. If your site isn’t suited to solar, you can purchase renewable energy through standard supply contracts or power purchase agreements.

In the short term, these measures will reduce operating costs while in the long term it will lay the foundation for reducing emissions and eventually switching to renewable sources.

Bruce Macfarlane is interim CEO and director at Energy Action.