Are you one of the 90% of businesses planning to accelerate their low carbon transition?
(this article was first published at edie.net)
A survey conducted by HSBC UK has revealed significant positivity around environmental sustainability within UK businesses, with 90% of those organisations surveyed planning to accelerate their low-carbon transition in the next three years.
The survey, which sought the views of business decision-makers and institutional investors primarily in the UK, France and Germany, found that 98% of UK business leaders see the climate transition as a commercial opportunity. Expected benefits of the transition included revenue and profit increases and reputational improvements, both selected by 48% of respondents; long-term business resilience (44%) and competitive advantage and new business opportunities (43%).
In terms of implementation, HSBC found that 65% of European businesses surveyed have now fully established or implemented climate transition plans, with 84% intending to accelerate efforts over the next three years.
Transition plans go beyond target-setting by supporting ambitions with plans for investment, skills, staffing and changes to processes and governance.
By 2028, HSBC expects the proportion of UK businesses allocating more than 10% CAPEX to climate-focused investments to triple.
These figures are favourable compared with international polling, which sees only 58% of businesses having established or fully implemented a climate transition strategy.
In terms of finance, 44% of EU businesses said they planned to emphasise sustainable finance and green investment strategies over alternatives, with a significant preference for green/sustainable trade finance (47%), sustainability-linked loans (41%) and transition finance (40%) as financing instruments of choice.
High costs were the main barrier to European businesses implementing sustainability plans, cited by one-third of respondents. This was followed by budget availability (31%), as well as lack of clear regulatory guidance, competitor landscape and supply chain complexities (all 26%).
Adoption of universal climate technology was occurring within 99% of those surveyed, though advancement levels varied. Technology gaps persisted, with insufficient availability, scalability and affordability listed as key barriers to implementation. However, 50% of businesses stated that clearer regulatory frameworks would assist in this regard, alongside greater availability of affordable financing (47%), and government incentives or subsidies (43%).
Investor pressure for transition plan mandate
This follows a recent call by some of the UK’s largest investors for UK policymakers to ‘swiftly’ adopt new sustainability reporting standards (SRS) for big businesses, in line with international best practice.
The majority of investors, as polled by the UK Sustainable Investment and Finance Association (UKSIF), want the new UK SRS to be aligned with the International Sustainability Standards Board’s (ISSB) existing two standards and forthcoming standards.
UKSIF’s members also want the Government to clarify its plans for making climate transition plans mandatory in both the financial services sector and real economy industries. The mandate was first confirmed by then-Chancellor Rishi Sunak in 2021, who intended at the time to operationalise it by the end of 2023.
Article Credit edie.net