Technology companies are usually seen as disruptors and first-movers. Yet when it comes to decarbonization, many tech companies are challenged with translating aspirations into actions. In fact, according to the annual KPMG global survey of more than 800 technology company leaders, more than half (53 percent) do not have a decarbonization strategy or targets in place.
What could be causing this lag, especially given the renewed focus on fighting climate change? The answer is multi-faceted as transformational initiatives have a variety of potential challenges that can curtail swift and meaningful results. Surprisingly though, over all others, tech insiders identified insufficient board engagement and investor focus on short-term goals as the top two barriers to decarbonization. The survey also revealed that only 13 percent of tech companies have remuneration incentives for directors to achieve decarbonization targets.
Perhaps the daily issues of operating a business amid the ongoing COVID-19 pandemic are still more pressing than the longer-term goal of achieving net zero. This hypothesis is supported by other survey responses. Sixty-four percent of tech leaders say their company has not calculated the potential financial impact of climate-related risks. And just 24 percent say climate-change considerations factor into their funding decisions.
Unfortunately, delayed action on decarbonization will increasingly create headwinds in the cost of capital, the war for talent, access to necessary material inputs, and consumer confidence. At the same time, the tech industry is ripe to reclaim its first-mover status by leveraging the resources, visibility, and influence to be innovators and positive role models in the fight against climate change, unlocking new value for investors, customers, and employees along the way.