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Why corporates need to step up to meet climate goals

Why corporates need to step up to meet climate goals

Why corporates need to step up to meet climate goals
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By CNBCTV18.com Dec 7, 2021 4:21:52 PM IST (Published)

Energy corporations have one of the most major roles to play as global demand for energy is only expected to increase.

Corporations need to actively contribute more in order to meet their own decarbonisation goals, as well as wider climate goals. The imperative of switching to decarbonised business initiatives is not only one of climate responsibility but also of financial viability, as funding will slowly begin to dry up for high carbon initiatives, revealed a KPMG report.

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The report, “Decarbonisation and evolving role of corporate boards”, highlights the role of corporate boards in bringing decarbonisation standards forwards while working towards the goal of net-zero emissions.
The report added that while large promises and commitments have been set by nations, organisations, and institutions, actual progress towards actionable goals have been slow and sluggish. In such an environment, corporations have a huge opportunity to also look towards non-financial targets like sustainability and decarbonisation.
Anish De, Global Sector Head, Energy, Natural Resources, and Chemicals, KPMG, said, “For corporates around the world, there are some key takeaways from the developments witnessed over the last year. Climate goals will keep ratcheting up and hence present goals and regulations need to be altered to achieve decarbonisation goals. Boards carry the principal fiduciary responsibility for making that change to happen."
Corporates have a real opportunity to not only make a difference, but utilise the momentum generated by COP26 to take a quantum leap. Corporate leadership, without waiting for legislation, could plan effective transition, as well as protect against the effects of climate change, added Ritesh Tiwari, Partner, KPMG.
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The report states that corporations must move away from doing the bare minimum as required by regulation and standards, and move towards bigger goals of sustainability than just compliance. The adoption of decarbonisation methods has in particular been lagging in the Energy and Natural Resources (ENR) sector, compared to most other sectors. Thus, it is the responsibility of the corporate boards of such companies to start steering them towards setting goals to deal with climate change even as the sector continues to be one of the most polluting in the world.
If they fail to do so, they may risk being left behind financially as well.
“It is not just de-carbonisation, but energy efficiency,” says De. “A lot of companies are going to low carbon because it’s cheaper — and it is going to get progressively cheaper.”
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