Australian businesses are struggling to achieve net-zero goals, hindered by costs and regulatory challenges, according to a Zurich report. 

About 73% of local executives surveyed for the report, Accelerating the Climate Transition, say their companies have a net-zero transition plan. 

However, 53% list costs and scale of capital expenditure needed as a challenge, 50% name regulations and 43% cite difficulty measuring and monitoring impact. 

“The transition to net-zero is a particularly complex challenge that will require significant investment, innovative solutions and bold initiatives if it is to succeed,” Zurich says. 

The Australia responses largely mirror the report’s global findings. 

Most companies are already actively setting net-zero targets and developing transition plans with 70% of those surveyed including those targets in their annual reports.  

But the most important barrier to developing a net-zero plan is costs and scale of capital expenditure, according to 50% of respondents. This is closely followed by three related roadblocks: lack of feasible technological solutions; regulatory challenges; and difficulties in measuring and monitoring impact. 

Zurich says overcoming these structural challenges will require businesses and the public sector to work together on reimagining and redesigning existing systems in areas like financing and investment. 

Achieving the net-zero transition by 2050 will require an unprecedented reallocation of capital – an estimated $US275 trillion ($425 trillion) of investment in physical assets. 

“Neither the public nor the private sector can deliver this scale of investment alone,” the report says. 

“Governments can reduce financing costs and promote public and private funding through enhanced investment frameworks or blended finance.” 

Zurich says the report aims to explore areas where the climate transition can be accelerated as the world is not on track to achieve the Paris Agreement  

“The survey shows that building resilience is a legitimate concern in the transition,” Zurich says. 

“In particular, companies across sectors indicated concern about supply-chain risks as they navigate the transition to net-zero.” 

The report is based on in-depth interviews with industry experts, a review of literature and the Sustainability Executives Survey carried out online in April and May. Australia, China and India made up the three Asia Pacific markets included in the Sustainability Executives Survey. 

Click here for the report.