Reaching net zero is only half the battle

The globe remains alarmingly far from the rate of decarbonisation required to stave off the worst effects of climate change. The Net Zero Economy Index 2022, a recent report from PwC UK, calculated the rate of reduction in carbon intensity (CO2 emissions relative to economic activity) among G20 nations, which account for 80% of global emissions, and found it to be at its lowest level in more than 20 years. Across the G20, the rate in 2021 was just 0.5%, a marked slowdown from the previous decade, and far below the 15.2% target annual decarbonisation rate now required to limit warming to 1.5°C. 

This yawning gap places more pressure than ever on companies to increase their net-zero commitments, accelerate those already underway, and seek deeper collaboration with governments and regulators. But leaders must also accept a sobering reality: decarbonisation represents only part of a viable climate strategy. With high-GDP countries continuing to blow past emissions targets, executives—from COOs to risk officers—need to build climate resilience into their operations and value chains to guard against the effects of global warming, from weather-induced supply chain disruptions to manufacturing facilities threatened by sea-level rise. Decoupling emissions from economic growth is not happening fast enough, and companies must adapt to the likely environmental consequences.