Read the full insights from the 2023 L.E.K. Decarbonisation Survey By John Goddard and Rebecca Scottorn, L.E.K. Consulting
have established net zero goals and strategy
Leaders report a wide array of decarbonisation initiatives.
Develop a realistic roadmap to turn strategy into reality.
What is the major goal of your decarbonisation efforts?
Formal strategy in place
13%
32%
39%
37%
9%
17%
19%
25%
Strategic alignment across key stakeholders
The leaders who report fewer barriers to decarbonisation are those from firms that have clear decarbonisation strategies.
The difficulty of funding decarbonisation initiatives is another barrier.
Leaders are broadly committed to decarbonisation, but strategic alignment holds organisations back.
have established a formal decarbonisation strategy and plan
82%
of which report their company is either on track or ahead of their decarbonisation plan
73%
Leaders report that they’re making decarbonisation plans. But when it come to progress on those plans, not all are on track.
Decarbonisation progress and the state of planning
Commitment of senior management
Employee skills and capabilities
Developing and maintaining performance metrics
No formal strategy
The cost of decarbonisation is a barrier to respondents achieving their ambitions
77%
Many firms don’t see the affordable alternatives available that they need
72%
Respondents are having difficulty obtaining capital to fund necessary decarbonisation investments
78%
Commitment of senior management
Agreement on details
Strategic alignment
Adequate incentives
Firms believe that senior management commitment is a barrier to decarbonisation
40%
20%
0%
Scope 3 Emissions
Problem
Most companies have committed to achieving Scope 1 and Scope 2 decarbonisation targets. Scope 3 commitments lag behind.
Commitments to decarbonisation targets by 2050 and beyond
Initiatives
Beyond 2050
2025
2030
2040
2050
80%
60%
Scope 1 Emissions
Scope 2 Emissions
We have committed to achieving net zero or carbon neutrality by this date for each scope type.
are designing products to reduce the intensity of their emissions
have invested in technology to track and manage emissions
are already using renewable energy sources
have begun hiring new talent to support net zero initiatives
have linked executive and management remuneration to decarbonization outcomes
63%
57%
41%
40%
54%
35%
Decarbonisation initiatives are clearly delivering in essential ways.
Decarbonisation initiatives are producing significant benefits
Benefits
Respondents report significant disagreement within leadership on how to balance short-term financial results with investments for long-term decarbonisation goals
Respondents did not agree that senior management and their organization are fully aligned on their decarbonisation strategy
Respondents believe management is inadequately incentivized due to insufficient use of decarbonisation outcomes in management remuneration structures
37%
49%
48%
20%
99%
75%
The firms that have the farthest-reaching decarbonisation goals report the greatest benefits. The more ambitious they are, the greater the benefits.
Lessons from leaders
“We have not clarified an overall goal”
“We are focusing only on meeting regulatory compliance and disclosure obligations”
“We are using decarbonisation to mitigate operational and reputational risks”
“We are factoring decarbonisation initiatives into business strategy and seeing it as a growth driver for the organisation”
“Decarbonisation is driving the strategic agenda as we look to be an innovator within our sector and lead with our values”
4%
18%
34%
29%
15%
Laggards
Minimalists
Risk Mitigators
Decarbonisation ambition levels vary from passive to highly proactive
Growth-focused Pragmatists
Value Leaders
Lessons
The more ambitious leaders were, the greater the benefits they report.
51%
of value leaders report that “our cost of capital has decreased,” and “we are in a better strategic position relative to our competition,” larger compared to any other group.
For leaders, the survey results offer several lessons
If you don’t have a formal decarbonisation plan in place, create one.
If your strategy is focused only on compliance, reconsider it.
Leaders in European geographies report having the most ambitious targets.
Drivers towards decarbonisation vary by region; initiatives are ahead in Europe, with regulation as a strong driver
Geographic Focus
What trade-offs are businesses prepared to make in order to achieve decarbonisation outcomes?
44%
57%
47%
42%
52%
65%
37%
37%
42%
43%
43%
48%
Our company should pursue decarbonisation, even at the cost of near-term profitability.
We should consider divesting a profitable business if it undermines sustainability goals.
France
Australia
United States
Germany
China
United Kingdom
French companies are most often willing to put decarbonisation goals before near-term financial targets.
While British respondents don't feel decarbonisation goals should supersede near-term profitability across the board, they often see divestment of unsustainable businesses as the right course of action.
The survey results reflect that the decarbonisation journey is complex, with many factors to consider and significant barriers to overcome. But many firms have committed to the journey and are already on their way.
Next steps for leadership
Conclusion
If you don’t have a formal strategy already, put one in place
01
03
Develop a realistic roadmap to turn strategy into reality
02
Reconsider strategies focused only on minimal compliance
Identify targeted solutions to overcome barriers
04
05
Begin making necessary investments now rather than later
Navigating The Journey To Decarbonisation
Download the Report
01
If you don’t have a formal strategy in place already, put one in place
02
Reconsider strategies focused only on minimal compliance
03
Develop a realistic roadmap to turn strategy into reality
04
Identify targeted solutions to overcome barriers
05
Begin making necessary investments now, don’t put them off for later
We have greatly reduced operating costs
We are significantly more energy efficient
Our sales have been positively impacted
We have been able to access additional funding
Our cost of capital has decreased
We have improved our employee brand
We have been able to improve our competitive position
Strongly Disagree
Agree
Strongly Agree
Neutral
Disagree
Our company has been able to realise a benefit in this area as a result of our decarbonisation efforts.
37%
9%
27%
24%
4%
38%
26%
20%
13%
5%
35%
29%
22%
12%
4%
27%
26%
32%
12%
4%
32%
22%
33%
10%
4%
26%
24%
37%
9%
5%
23%
30%
34%
10%
4%
have realized at least one benefit
99%
have realized at least three benefits
75%
Among leaders at firms that have undertaken decarbonisation initiatives:
3%
9%
3%
26%
24%
51%
49%
15%
74%
73%
54%
77%
78%
76%
About the authors
John Goddard
Senior Partner
Rebecca Scottorn
PARTNER
John Goddard is Vice Chair for Sustainability and a Senior Partner at L.E.K. Consulting. He leads the firm’s sustainability initiatives and is a founding member of the L.E.K. Sustainability Centre of Excellence. He has been providing though leadership and fresh insights through L.E.K.’s platform and external media outlets such as the Financial Times, The Economist, CNBC, HBR and more.
Learn more
John Goddard
Rebecca Scottorn is a Partner at L.E.K. Consulting and part of the global Industrials Practice. A leader of L.E.K.’s work on ESG and sustainability strategy development, she advises clients on taking a holistic, commercial approach to sustainability and making the right strategic choices to underpin long-term success. Rebecca co-founded L.E.K.’s Sustainability Centre of Excellence which combines the expertise of over 25 partners across sectors and regions.
Learn more
Rebecca Scottorn
United Kingdom
China
United States
Germany
Australia
France
Read the full insights from the 2023 L.E.K. Decarbonisation Survey By John Goddard and Rebecca Scottorn, L.E.K. Consulting
In early 2023, L.E.K. Consulting asked 400 global leaders about their commitment to decarbonisation and the barriers they face.
Navigating The Journey To Decarbonisation
Leaders Survey
25%
Leaders located in the United States
15%
Leaders located in Germany
15%
Leaders located in France
15%
Leaders located in the United Kingdom
15%
Leaders located in China
15%
Leaders located in Australia
View Infographic
Download the Report
Industrials
34%
Healthcare
24%
Consumer Products
21%
Transportation
14%
Energy
7%
Sectors
L.E.K. surveyed 400 leaders of global companies from these countries and sectors.
Difficulty translating commitments into actions
CHALLENGES
Many firms are committing to achieving net-zero or carbon-neutral status by 2050
PROGRESS
Companies
Significant investment shortfall remains
CHALLENGES
Investment has enabled development of viable decarbonisation technologies
PROGRESS
Investment
Recent need to prioritise energy security
CHALLENGES
Regulation has accelerated in recent years, both at a country/regional level and across sectors, e.g., EU CSRD, TCFD, SEC plans
PROGRESS
Governments and Regulation
Many firms are committing to achieving net-zero or carbon-neutral status by 2050
Investment has enabled development of viable decarbonisation technologies
Regulation has accelerated in recent years, particularly in energy and automotive sectors
Difficulty translating commitments into actions
Significant investment shortfall remains
Recent need to prioritise energy security
Companies
Investment
Governments and Regulation
We found that leaders and organisations are strongly committed to decarbonisation — perhaps surprisingly so. But turning commitment into reality is a major challenge.
Decarbonisation Progress and Challenges
Overview
Formal strategy in place
No formal strategy
13%
9%
32%
17%
39%
19%
37%
25%
Strategic alignment across key stakeholders
Commitment of senior management
Employee skills and capabilities
Developing and maintaining performance metrics
The leaders who report fewer barriers to decarbonisation are those from firms that have clear decarbonisation strategies.
The difficulty of funding decarbonisation initiatives is another barrier.
Respondents are having difficulty obtaining capital to fund necessary decarbonisation investments
78%
Many firms don’t see the affordable alternatives available that they need
72%
The cost of decarbonisation is a barrier to respondents achieving their ambitions
77%
Leaders are broadly committed to decarbonisation, but strategic alignment holds organisations back.
Commitment of senior management
Agreement on details
Strategic alignment
Adequate incentives
Firms believe that senior management commitment is a barrier to decarbonisation
20%
Respondents report significant disagreement within leadership on how to balance short-term financial results with investments for long-term decarbonisation goals
49%
Respondents did not agree that senior management and their organization are fully aligned on their decarbonisation strategy
48%
Respondents believe management is inadequately incentivized due to insufficient use of decarbonisation outcomes in management remuneration structures
37%
have established a formal decarbonisation strategy and plan
82%
of which report their company is either on track or ahead of their decarbonisation plan
73%
Leaders report that they’re making decarbonisation plans. But when it come to progress on those plans, not all are on track.
Decarbonisation progress and the state of planning
Barriers
40%
80%
60%
20%
3%
9%
3%
24%
26%
51%
49%
15%
74%
54%
73%
77%
76%
78%
0%
Beyond 2050
2050
2040
2030
2025
Scope 3 Emissions
Scope 2 Emissions
Scope 1 Emissions
63%
have established net zero goals and strategy
are designing products to reduce the intensity of their emissions
41%
have invested in technology to track and manage emissions
40%
are already using renewable energy sources
57%
have begun hiring new talent to support net zero initiatives
54%
have linked executive and management remuneration to decarbonization outcomes
35%
Leaders report a wide array of decarbonisation initiatives.
We have committed to achieving net zero or carbon neutrality by this date for each scope type.
Most companies have committed to achieving Scope 1 and Scope 2 decarbonisation targets. Scope 3 commitments lag behind.
Commitments to decarbonisation targets by 2050 and beyond
Initiatives
In early 2023, L.E.K. Consulting asked 400 global leaders about their commitment to decarbonisation and the barriers they face.
Navigating The Journey To Decarbonisation
Leaders Survey
Download Report
View Infographic
25%
Leaders located in the United States
15%
Leaders located in Germany
15%
Leaders located in France
15%
Leaders located in the United Kingdom
15%
Leaders located in China
15%
Leaders located in Australia
Industrials
34%
Healthcare
24%
Consumer Products
21%
Transportation
14%
Energy
7%
Sectors
Difficulty translating commitments into actions
CHALLENGES
Many firms are committing to achieving net-zero or carbon-neutral status by 2050
PROGRESS
Companies
Significant investment shortfall remains
CHALLENGES
Investment has enabled development of viable decarbonisation technologies
PROGRESS
Investment
Recent need to prioritise energy security
CHALLENGES
Regulation has accelerated in recent years, both at a country/regional level and across sectors, e.g., EU CSRD, TCFD, SEC plans
PROGRESS
Governments and Regulation
We found that leaders and organisations are strongly committed to decarbonisation — perhaps surprisingly so. But turning commitment into reality is a major challenge.
Decarbonisation Progress and Challenges
Overview