Home / Industry / Energy /  Corporates face the challenge of clean energy: report

NEW DELHI : New reporting standards set by World Economic Forum in association with key leading professional services firms, have reformed stringent metrics which will support in evaluating SDG’s performance and associated national determined contributions (NDCs), a new report by KPMG said on Monday.

The report titled “Decarbonization and evolving role of corporate boards," highlights how corporate boards can meet the challenges of carbon constrained world.

It discusses the imperatives of decarbonization and the requirement of a system perspective that incorporates energy demand management, improves energy efficiency, new reporting standards and increases the share of clean energy in the overall energy mix.

According to the report, most companies are unclear of the pathway to accomplish their goal of net-zero carbon emissions. 

Anish De, Global Sector Head- Energy, Natural Resources and Chemicals, KPMG in India 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 needs to be altered to achieve decarbonization goals."

 “Corporates have a real opportunity to not only make a difference, but utilize 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," commented Ritesh Tiwari, Partner, KPMG.

The report highlights that the Climate responses towards actionable goals are slow. Government, financing institutions, and industry participants are coming together through alliances to collaborate and focus towards taking stronger actions, but the pace of energy transition is stagnant. 

The investment dynamics in energy sector are changing, globally. The companies need to balance their investments across technology portfolios, said the KPMG ENRich 2021 report. 

 “The focus of corporates has to shift to adaptation. In this new and changing normal on climate mitigation and adaptation for corporates, boards carry the principal fiduciary responsibility for making that change happen. Boards across sectors have initiated measures for driving board level governance for climate change. However, the adoption of such measures remains low for Energy and Natural Resources (ENR) companies compared to other sectors," said Anish. 

The corporate leadership has recognized climate change as a major risk for the energy CEOs. The energy organizations need to have specific priorities in the revolution for clean energy. The sector continues to power the world on the back of fossil fuels.

According to the report, 81 percent of the organizations are actively disrupting the sector in which they operate, and 85 percent see the technological disruption as an opportunity and not a threat. The energy companies will have to walk a tight rope, meeting increasing demands with changing resource portfolios and ensuring affordability, said the report. 

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