Microsoft: 59% of UK Organisations Will Miss Government 2050 Net Zero Target Without Urgent Action on Carbon Reduction, Research Reveals

Just 41% of UK organisations are on track to meet the Government's target for net zero carbon emissions by 2050, according to new research released today by Dr Chris Brauer, Goldsmiths, University of London in partnership with Microsoft.

The findings reveal strong ambition and strategic vision on sustainability within UK organisations, but most leaders are struggling to translate that intent into action, with almost three quarters (74%) described as having "one foot in and one foot out" on sustainability.

Based on online surveys of 1,707 UK business leaders and 2,153 employees, the research report includes insights from leading British organisations, as well as prominent sustainable business experts from across government, industry and academia.

The ambition-action gap has not gone unnoticed by UK workers. According to the survey, the majority (72%) of employees surveyed felt that environmental sustainability should be a top priority for businesses over the next five years, yet only 19% report that their employer implements their current sustainability plan efficiently. Tellingly, only 17% of employees believe their work premises are as environmentally friendly as their own home. This is important, as almost half (48%) of employees surveyed said the strength of a firms' sustainability plan would impact where they choose to work.

The challenges for business and a blueprint for net zero

The report points to the most pressing sustainability challenges identified by UK leaders in meeting net zero goals and outlines a practical blueprint of short- and long-term actions to overcome them. When asked to identify their top three most pressing challenges in the next five to 10 years, the top challenges highlighted by organisations surveyed include:

• Actioning the strategy ? Concerns about having a clear organisational sustainability strategy (43%)
• Guidance ? 41% of respondents cited clear government guidance as a challenge, but the report points to the need for whole systems thinking, including collaboration between government, commerce, academia and NGOs to collectively address barriers to net zero
• Skills ? Having in-house expertise and skills to support a sustainability strategy (40%)
• Financing ? Having access to funding to implement their sustainability plan (36%)
• Getting the most out of technology ?The availability of technology to support sustainability initiatives (33%)

The Sustainability Leaders

The research team developed a scorecard against which to benchmark UK organisations' progress on environmental sustainability. Based on the results, organisations were categorised into one of three groups:

• Sustainability Leaders ? just 11% of UK organisations ? distinctive in their ability to unlock funding and develop technology to meet sustainability goals, with highly supportive leadership and strong stakeholder buy in. This group is on track to meet net zero targets.
• Aspirational ? 74% of organisations ? better at raising their ambitions and designing strategies for sustainability than executing them. They have the operational potential to reach net zero, but faster transformation is needed.
• Stragglers ? only 15% of organisations ? have embedded sustainability within their strategy but are currently making very slow progress on goals. This group are unlikely to reach net zero by 2050, unless ambition becomes genuine action.

One factor setting the Sustainability Leaders apart is their ability to harness the potential of technology to amplify and accelerate their net zero strategies. Three quarters of this group are investing in R&D for new technologies (76%), including tech to measure carbon emissions (76%), and many are also building the in-house skills needed to make the most of these technologies.

Technologies enabling sustainability

The report also explores the role of technology in the journey to net zero. Where the business case is proven to make a meaningful contribution to sustainability, organisations are investing in the greenest solutions. Examples include business productivity technologies (used by 89% of firms), collaboration technologies (70%), cloud technologies (69%) and carbon emissions measurement technologies (33%).

And there is appetite for increasingly sophisticated technology over the next five years to reduce carbon emissions. Business leaders will shift their focus to more intensive use of carbon emissions measurement technology (56%), Robotic Process Automation (RPA, 51%), machine learning (53%), and ?digital twin' technologies (55%) ? a rapidly growing territory for digital simulation of business processes and strategies at scale without the real-world waste.

Clare Barclay, CEO of Microsoft UK, comments: "If the UK is to meet its net zero ambitions, public and private sectors need to join forces to define the meaning of real net zero, agree how to measure progress and build markets that can deliver a just, prosperous future for everyone.

"Technology will play a key role in addressing these challenges and it's clear from our research that those organisations that have embedded technology in the heart of their strategies are the ones that have made the most significant progress against their sustainability goals. And whilst it is encouraging that so many of the organisations surveyed are taking the threat of climate change seriously, the time has come to move from ambition to action. We must work collectively to accelerate our journey to net zero."

Dr Chris Brauer, Director of Innovation, Institute of Management Studies (IMS) at Goldsmiths, University of London, comments: "UK organisations have strong net zero ambitions. But to truly address the climate emergency before us, actions must speak louder than words. Today's findings don't just call for progress, they outline a practical short- and long-term blueprint to help organisations accelerate net zero progress. If organisations can prioritise areas such as cross-sector collaboration, stakeholder buy-in, in-house expertise and technology to track carbon reduction progress, the positive environmental impact could be seismic."

Sam Kimmins, Head of RE100 at The Climate Group, adds, "These figures can and must increase, with large organisations using their scale and influence to lead the way. Companies need to really work with their suppliers to drive shared sustainability goals fast. If a large firm greens a supply chain that is also supplying 30 other companies, you get a positive multiplier effect."

Please visit aka.ms/UKSustainability to download a copy of the report.

-Ends-

Notes to Editors

Microsoft is accelerating progress toward a more sustainable future by reducing its own environmental footprint, pledging to be carbon negative by 2030, accelerating research and advocating for policies that benefit the environment.

By 2050 the company will remove from the atmosphere all the carbon dioxide it has emitted (either directly or through electricity consumption) since being founded in 1975. It will also be zero waste and water positive by the end of this decade.

For more information on Microsoft's sustainability initiatives please visit: https://www.microsoft.com/en-us/sustainability

About the research

The research was conducted in summer and autumn 2021 by Microsoft in partnership with Dr Chris Brauer, Director of Innovation, Goldsmiths, University of London leading a team of economists, data scientists, environmental scientists and social scientists. They used a mixed method approach to build a model, scorecard and blueprint for carbon reduction in UK businesses. This included:

• An in-depth literature review of academic, industry and media knowledge and data sources.
• Barometer surveys conducted by YouGov among 1,707 leaders that are senior decision makers and above and 2,153 adults that are full time employees. Fieldwork was undertaken between 30th July - 18th August 2021. The survey was carried out online.
• Using survey findings, the researchers developed a scorecard to differentiate companies and indicate how close they are to achieving their decarbonisation objectives. The criteria for this scorecard were grouped in two categories ? sustainability and innovation ? and enabled an in-depth sustainability mapping exercise, using the results of the survey, to place organisations on a scale between varying levels of adoption.
• To be able to extrapolate results from the scorecard to the economy, results were weighted by the share of organisations in the total economy, assuming a standard normal distribution of the population, and veracity of responses. The results are within statistical confidence and the numbers presented were rounded for simplicity.
• Qualitative exploration ? interviews with a variety of academics, professionals and UK company case study leaders around both the research model and the findings of this project. Quotes were analysed and used as evidence to support hypotheses.