The World Business Council for Sustainable Development (WBCSD) published Business Breakthrough Barometer 2024 (October 2024) which provides the first annual pulse-check from leading businesses on the opportunities and challenges of the net-zero transition. It also highlights where governments can focus efforts to create stronger market incentives for investment. The report includes interviews from 250 executives from 65 transition-leading businesses that are worth more than US$2 trillion in value. The following sectors are covered: road transport, buildings, steel, cement, power and hydrogen, shipping, aviation, chemicals, sustainable fuels and batteries. Collectively, these sectors make up more than 70% of total global emissions.
Human Level’s Take
- The Business Breakthrough Barometer 2024 highlights a major shift in the business landscape: companies are not only ramping up investment in the net-zero transition, with nearly three-quarters increasing their spending, but also see this shift as a substantial opportunity for growth.
- With 91% of leading businesses viewing the transition as a commercial opportunity, there's clear appetite for change and companies are already investing in the transition.
- Yet, businesses face significant obstacles, such as inflated infrastructure costs, slow permitting processes and limited low-carbon fuel supplies. All of which hinder the rate of the net-zero transition.
- To overcome these obstacles, businesses need governments to step up in the form of bold policies. They need policies that fast-track and simplify permitting processes for critical infrastructure, and centre early engagement with communities; guarantee revenues for early-stage technologies; and funnel capital toward infrastructure development.
- This report underscores that a coordinated approach — where governments set clear and aligned policies and implement targeted funding, and businesses bring capital and innovation — is essential to drive rapid, scalable and equitable progress on the path to net zero. And it is critical that companies, along with governments, centre people in the transition.
- Now is the time for companies to ask: How can we leverage our influence to advocate for the policies that will unlock the path to a net-zero economy?
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- Businesses are scaling investments: Three-quarters (74%) of leading businesses reported increasing their investments in the net-zero transition over the past three years, with a third committing more than 50% of their capital expenditure. The investment is driven by the growing commercial opportunity that the transition presents, with 91% of leading businesses viewing the transition as an opportunity. Clean energy investment soared in 2024 and the explosion in battery manufacturing capacity and rapid cost reduction is expanding electrification opportunities. In addition, policy measures such as the U.S. Inflation Reduction Act, forthcoming EU Sustainable Aviation Fuel (SAF) mandates and hydrogen auctions are driving the investment of businesses on decarbonisation strategies.
- The barriers to acceleration: 66% of leading businesses state that the investment case and infrastructure are the main barriers to accelerating investment in the net-zero transition. More specifically, businesses refer to a 50% inflation in plant capital expenditure costs, rising renewable energy prices, uncertain revenue models, slow permitting processes, limited low-carbon fuel supply, long grid interconnection queues and slow roll-out of charging networks as slowing down investments.
- Measures to unlock barriers: To unlock the barriers to increased investments, businesses cite the need for long-term sector-specific industrial policies, with a focus on simplified permitting, mandated demand, revenue guarantees for early-stage technologies and direct government intervention to build-out infrastructure and continued innovation funding. In addition, more effective coordination among major economies in the following areas is essential. This has been taken directly from the report:some text
- 1) Harmonised definitions and standards: Global alignment on standards and definitions for key technologies — such as green hydrogen, steel and batteries — is a prerequisite for market integration.
- 2) Stronger demand-side policy coordination: Greater demand-side policy alignment between countries, including on green product mandates, phase-out dates and public procurement targets could accelerate the scale-up and diffusion of technologies through global markets and spread the risks and costs between countries.
- 3) Fit-for-purpose and aligned trade rules: Transition leaders are supportive of international trade rules that incentivise decarbonization efforts but are seeking consistency and careful design that avoids distorting global markets and increasing trade tensions and fragmentation.
- 4) Cross-border infrastructure development: For specific sectors including power, hydrogen and road transport, businesses identify the need for stronger regional coordination to enable markets to reach scale faster and deliver benefits to consumers.
- Bold government policies are needed: Businesses state that strong industrial policy, with multi-year transition plans backed up by sector-specific policies, are needed from governments to drive the transition further and faster. More specifically, this means fast-tracking and simplifying permitting processes for critical infrastructure, with early engagement with communities to build societal support; well-designed mandates, with penalties for non-compliance, and the use of public procurement; revenue guarantees of early stage technologies like green hydrogen; fixing infrastructure development; and targeted funding towards sectors where solutions are underdeveloped, such as cement and chemicals. Over 90% of businesses say that progress in these critical policy areas would positively impact investment levels. In addition, businesses are calling for a just and equitable transition in policy priorities. For instance, companies in the shipping sector call for flexibility mechanisms and revenue disbursements to support vulnerable countries in accelerating their efforts to transition, while also helping them adapt to and mitigate the negative impacts of climate change.
