Friday, June 14, 2024

Skill gap hinders road to net zero

A skills shortage is holding Australian businesses back on their energy transition journey, finds new research.

According to Schneider Electric’s latest research, ‘Sustainability Index: transforming intention to outcomes’, over half (52%) of the Australian business leaders surveyed cite this as a hinderance.

“Corporate Australia is committed to energy transition, but our research shows that without proper support and intelligence, a significant proportion are struggling to make an impact on their emissions,” says Schneider Electric Pacific Zone President Gareth O’Reilly.

14% of the respondents admitted they don’t know where to start in setting carbon emissions reduction targets. 12% were also unsure how to create an energy usage data capture and reporting strategy to understand their current emissions.

The findings, says Schneider Electric, may explain why “only” 14% of respondents said their companies had developed and published a climate action plan internally. This is the same case as to why “only” 11% had publicly shared an intention to reduce their carbon emissions and “just” 7% had announced any commitment to reach net zero.

“Energy transition is inevitable for all businesses, what we need now is quick and effective outcomes,” says Mr O’Reilly. “Key to this will be helping businesses understand their emissions and what to do to reduce them.”

Understanding the Scopes

Currently carbon emissions are measured across three scopes. The first (Scope 1) covers emissions from a company’s owned or controlled resources. The second (Scope 2) are those generated from purchased energy, such as gas and electricity. Finally, Scope 3 emissions are created indirectly through a business’ value chain by third parties, such as its suppliers and end users.

The data shows that anywhere between a quarter to a third of business leaders are struggling to understand their emissions across these scopes:

Scope 1 and 2:

  • Natural gas (25%)
  • Refrigerants (25%)
  • Transport fuels (26%)
  • Other liquid fuels (30%)
  • Electricity (14%)

Scope 3: 

  • Upstream leased assets (33%)
  • Employee commuting (26%)
  • Capital goods (24%)
  • Business travel (21%)
  • Franchises (35%)
  • Investments (25%)

“When you consider the breadth of carbon emissions a company can contribute to, it’s clear that expert skills are essential to effective energy transition,” says Mr O’Reilly.

Third party assistance

“Encouragingly,” says Mr O’Reilly, “businesses are identifying the quickest way to gain the expertise they need is through third parties.”

38% of respondents confirmed that they are receiving external partner support in decarbonising. This included over half (55%) of Australia’s large companies with 200-plus employees, almost half (48%) of medium-sized companies and 29% of small businesses with less than 20 employees.

Companies that engaged third party experts were more likely to have implemented energy management systems (41%), IOT assets (40%) and specific software (35%). Companies which hadn’t gained assistance have lower levels of adoption (24%, 17% and 18% respectively).

Large companies were also most likely to have either identified their material risks and started to develop an action plan (35%), or to have already published one (23%).

“It’s make or break time for businesses to address energy transition and sustainability skills will be a leading determinant in those that get ahead and those that fall behind,” says Mr O’Reilly.

“Businesses must secure their access to the decarbonisation expertise now, or potentially fall through the sustainability skills gap on the road to net zero.”

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