* 64% of 250 executives say moving is not commercially viable
* ‘Fight for justification’ renunciation of short-term returns
* 62% believe that the costs of transition outweigh the benefits
LONDON, March 25 (Reuters) – Two-thirds of senior executives believe it is not currently commercially viable to work as a zero-emission business, according to a global survey commissioned by British lender Standard Chartered.
A survey of 250 Zeronomics executives found that focusing on short-term returns means that 77% of companies “struggle to justify” by giving up reliable revenues from a proven business model in exchange for uncertain future returns.
“Companies also doubt whether the work required to transition their organizations will pay off,” the report said, and 62% of executives believe the expected benefits of switching to a lower-carbon business do not outweigh the costs.
Companies are under pressure from investors to ensure their businesses are ready to progress in the global transition to a low-carbon economy, while policymakers exaggerate economies in response to the challenge posed by climate change.
However, the pace of change remains slow, frustrating investors urging companies to move faster and be more open to their plans.
Nevertheless, research has shown that managers have seen a number of obstacles to progress, including the need for higher levels of funding, especially in developing economies, and better standards of measurement and reporting.
Among the factors that could help bring about faster change were more evidence of potential cost benefits, increased pressure from supply chain partners and investors, and an effective global carbon tax, executives said.
“Despite the need for urgent action, the move to net zero carbon is a long-term project with long-term benefits,” the report said. “However, companies are not established to watch for long.”
A simultaneous survey of 100 leading investors found that 93% believe that the relatively short term of the average CEO interferes with their ability to act – attitudes are shared by 79% of executives.
While 64% of investors said most business leaders are focused on short-term performance versus long-term value creation, 90% said the net-zero plan announced by the company’s CEO was a “critically important” driver of its attractiveness as an investment.
“Two-thirds believe that the strategy and leadership of a zero-zero company are now a better predictor of future corporate success than its past financial results,” the report said.
“If CEOs become climate leaders, this could pave the way for zero.” (Report by Simon Jessop. Edited by Mark Potter)