Fidelity International's third annual ESG analyst survey reveals a gap between the necessary action for achieving net zero emissions and current corporate efforts.
The 'Fidelity ESG Analyst Survey 2023: Mind the gap', based on inputs from 15,000 company interactions, shows that less than 60% of firms are on track to reach net zero carbon emissions by 2050 and only 25% by 2030.
While 69% of European companies are allocating funds to meet the 2050 targets, challenges such as technology gaps and insufficient funding remain.
Government regulation is identified as a key driver for change, with over 60% of analysts highlighting its importance in driving environmental, social and governance practices.
Investor engagement and shareholder action are also effective catalysts for improvement, the report states.
Jenn-Hui Tan, global head of stewardship and sustainable investing at Fidelity International, emphasises the need for collective efforts to bridge the gap. Tan states, "Not yet and a greater collective effort is needed. Funding, innovation and regulation are key areas to address. Governments and the financial sector have a crucial role to play in creating an enabling environment for the transition."
The report also found that China, while making progress, lags in the setting of net zero goals, with only a quarter of companies having such targets compared to the global average of over 50%.
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