The race to net-zero emissions will forever change the way many companies do business. The immediacy, pace, and extent of change are still widely underestimated. Early movers can seize significant advantage.
Even as global climate action accelerates, many companies remain ill prepared. They collectively underestimate the change ahead and act too conservatively, risking stranded assets and obsolete business models as a result.
Leading companies across sectors—from automotive to food and from shipping to power—are starting to prove that the net-zero transition is a business opportunity that can bring sustainable competitive advantage. These leaders are not just creating more value; they are often changing the game in their industries by showing the way to a profitable, sustainable future.
Consider three facts about early movers on climate change:
1. They gain competitive advantage. Climate leaders can attract and retain better talent, realize higher growth, save costs, avoid regulatory risk, access cheaper capital, and achieve higher shareholder returns. (See Exhibit 1.)
2. Leaders can achieve sizable emissions reductions at net-zero cost. By becoming more energy-efficient and switching to lower-cost renewable power, for example, leaders can realize significant cost savings, which they can then use to fund more costly decarbonization levers. (See Exhibit 2.) Almost all companies can realize at least a third of emissions reductions at net-zero cost to their business. Companies in the food, consumer and automotive sectors can reduce scope 1 and 2 emissions by approximately 70% at net-zero cost.
3. They raise the bar for their industry. Sustainability is now a competitive consideration. At the very least, companies do not want to be seen as lagging—so if one company moves, others feel pressure to follow. (See Exhibit 3.) The goalposts are shifting quickly. A single company with the courage to set ambitious targets can move its entire industry.
Across all sectors need to navigate an unprecedented global transformation. On the path to net zero, they must successfully transform their strategy, operations, business portfolio, and organization. There is no blueprint for what lies ahead, but we can identify challenges to look out for and moves to consider.