KPMG: Why Companies Aren’t Going To Hit Net Zero Goals
The race for net zero is on, but it is one that we must run together.
Companies and countries alike have spent the last few years setting sustainability goals to achieve net zero, often structured with short-, mid- and long-term goals to hit.
As 2025, 2027 and 2030 loom, these goals are, for some organisations, becoming unrealistic.
“Although there's long term targets in sustainability there often isn't long term planning – that's where we're getting to now,” explains Simon Weaver, Global Head of ESG and Sustainability Advisory at KPMG.
“The leaders that I work with have been very quiet the last year because they have been focused much more on how to actually now achieve these goals.
“Now that they have some idea of what that level of investment is needed, leaders are asking their teams:
- “Is that realistic?
- “Can we prioritise that across all of our other investments?
- “How will that land with investors?”
Meet Simon Weaver, Global Head of ESG and Sustainability Advisory at KPMG
Simon is a Partner at KPMG based in the UK, but with a global role as Global Head of ESG and Sustainability Advisory.
There are two key parts to his role – embedding sustainability into KPMG and supporting clients on their sustainability journeys.
“We recognise that where we can have a huge influence on the ultimate aim of decarbonising the end to end economy around the world is in every bit of advice we give, taking sustainability into account,” Simon explains.
Long-term planning for sustainable sustainability goals
To not just meet the upcoming individual sustainability goals but to achieve the wider goals set out in The Paris Agreement, Simon believes that there are three key stakeholders that need to come together:
- Corporations and their boards
- Governments and regulators
- Consumers
Looking specifically at the first group, Simon says that long term planning is key.
“We should be adjusting and stretching our mindset and planning horizons to look further ahead – I know very few businesses that look beyond three years,” he says.
“In many organisations, the Chief Sustainability Officer role is held by someone very talented but actually quite junior, yet they feel like they're having to think further ahead than the CEO – and in the political environment it's no different.
“Politicians should, in an ideal world, be the ones that are thinking further ahead and putting policies in place, even if they're horrible for today, that put us in the right position in 10, 15, 20 years time. But that's very easy for me to say, it's much harder for it to be the reality when they're trying to win votes.”
To support long term planning, Simon highlights the importance of collaboration and communication.
“The Transition Plan Taskforce around climate transition plans is a real game changer,” he says.
“Those who are starting to look at doing a proper climate transition plan are now getting to the moment of realising that it actually is really hard.
“It is the point after they have done the easy things that saved them money as well as carbon but they now have to do the things that will cost money in the next three years of their normal planning cycles.
“So companies need to understand that there will be long term benefits but short term costs, and it's the job of the sustainability leaders to get that past the relevant committees.”
The honesty-first, collaborative approach
“We need more honesty about where companies are at with their goals – at the moment I'm not going to a single board where they think they're going to hit their 2030 targets,” Simon says.
As companies now are adjusting their targets, conversations around offsetting emissions or renewable credits arise.
“For me that's dangerous because whilst I agree we need that in the long term, if you start to move to that to meet your 2030 targets, it is unlikely that the money is being put in the right place for long term sustainability success,” he adds.
Simon and his teams at KPMG are developing forums to facilitate communication between sustainability stakeholders at every level of organisations to ensure the necessary collaboration.
“I run the Chief Sustainability Officer Forum, but we're also looking to get groups of Chief Finance Officers, CEOs and Chairs together as well.
“I’m working towards KPMG playing a role in recognising where we're at in the market and setting some sort of framework around where the markets at generally before the next results come out in March or April which is the next obvious moment for most companies to kind of make announcements around their targets.
“This framework will allow people to say ‘well actually I'm slightly off track as well and this is what we're planning to do’, which will boost communication and honesty.
“If we can facilitate that honesty with the market and foster collaboration on the bigger elements that may not get the immediate gains, but get where we need to in the longer term – I think that's key.”
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