2022-10-06-德勤-Decarbonization_in_energy_and_manufacturing_28页_9mb

Decarbonization is critical for the energy and manufacturing industries, which account for over 75% of global emissions and hold $2 trillion in debt. Financial executives play an increasingly pivotal role in shaping decarbonization strategies (D-strategy).

Key findings from the Deloitte survey of nearly 140 US financial executives:

• Over two-thirds believe green investments are vital, but only 17% view decarbonization as a profitable investment, with most seeing it as a cost.
• The higher the financial executive's decision-making role, the more comprehensive the D-strategy and the higher the green investment allocation (often exceeding 10% of cash flows).
• Without clear ESG reporting standards, executives struggle to quantify and report environmental progress, hindering strategy development.

Industries face unique challenges:

• Oil, Gas & Chemicals: Balancing continued hydrocarbon revenue with costly decarbonization; executives see price volatility as a major trade-off.
• Power & Utilities: Regulatory hurdles and rate design complexities impede decarbonization financing.
• Manufacturing: Hard-to-abate processes and inefficient supply chains constrain emissions reductions.

To navigate these challenges, financial executives are advised to:

• Take proactive roles in setting net-zero targets and integrating ESG metrics.
• Advocate for policy support like carbon pricing and standardized reporting.
• Explore innovative funding mechanisms beyond traditional cash flows, including grants, partnerships, and green bonds.

Notable quotes include:

• "Financial executives with decision-making participation... have found a new cash flow equation to fund their strategies." (Stanley Porter)

This transformation underscores the CFO's evolving role as a strategic partner in enabling sustainability, aligning financial and environmental goals for long-term value creation.