Zeronomics: Global Carbon Tax Key To Pushing Energy Transition Agenda In Africa

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More than half of African companies are delaying their energy transition targets, leaving them in danger of missing the Paris Agreement target of net-zero carbon emissions by 2050, new research from Standard Chartered has revealed.

Zeronomics, a study into the financing of a net-zero world, surveyed the senior leadership of 250 large companies and 100 investment specialists around the world between September and October 2020 and found that:

  • 55 per cent of Africa-based business leaders believe their companies are not transitioning fast enough (55 per cent of companies globally)
  • Lack of access to finance is the biggest barrier to progress for African companies, cited as a significant obstacle by 78 per cent (67 per cent globally)
  • Just 35 per cent of African companies fully support the aims of the Paris Agreement (47 per cent globally)

What are the barriers?

Many companies based in Africa are looking to delay significant action to after 2030, with the 2020s looking set to be a lost decade. Some 32 per cent of business leaders (34 per cent globally) said their companies will make the most progress between 2030 and 2040, while a further 40 per cent (37 per cent globally) said they will take most action between 2040 and 2050.

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Most companies are delaying transition because they do not feel they are currently equipped to meet the target. Some 78 per cent (59 per cent globally) said they need an extensive organizational change before tackling net zero.

A lack of finance isn’t the only hurdle companies in Africa’s face on the road to 2050. Seventy-two per cent (63 per cent globally) believe a lack of consensus on net-zero definitions and targets is hampering progress, while the same percentage (60 per cent globally) say a lack of support for net-zero transition from their organization’s investors is a significant barrier to net zero.

Meanwhile, COVID-19 is forcing many businesses in the region to focus on immediate survival: A whopping 80 per cent (85 per cent globally) of African senior executives say the pandemic has delayed their company’s net-zero transition.

How To Fix It

The research also reveals what business leaders believe is needed in order to speed up the transition. 90 per cent (77 per cent globally) believe an effective global carbon tax, based on a carbon price that reflects the true cost of climate change, would help the transition.

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A further 88 per cent (81 per cent globally) said cost savings from sustainable practices could help the world hit net zero by 2050. Meanwhile, the same percentage (81 per cent globally) believe standardized net-zero measurement frameworks would help with the transition, underlining the fact that what we have currently, a matrix of different definitions, measurement, and reporting requirements is a major challenge for senior executives.

What are the top accelerators of net-zero transition? Africa (%) Globally (%)
An effective global carbon tax 90 77
Standardised global net zero transition measurement, disclosure and ratings frameworks 88 81
Increased operational efficiency / cost savings from sustainable practices 88 81
Increased shareholder activism / investor scrutiny and pressure 82 78
Increased investor demand for net-zero transition themed assets 82 72
Inclusion of net zero transition as a key part of investors fiduciary duties 80 74

 

Bill Winters, Group Chief Executive of Standard Chartered says: “Our survey reveals that most companies intend to transition to net-zero by 2050 but have yet to take the action needed to get there. A majority cite funding as an obstacle and carbon-intensive industries and emerging-market companies struggle the most.

“A successful net-zero transition must be just, leaving no nation, region or community behind and, despite the hurdles, action needs to be swift. We must act now, and we must act together: companies, consumers, governments, regulators and the finance industry must collaborate to develop sustainable solutions, technologies and infrastructure.”

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Sarmad Lone, Regional Head, Client Coverage Corporate, Commercial & Institutional Banking Africa & Middle East, Standard Chartered Bank added: “Our survey reveals that there is significant opportunity in Africa to pave the way for zero-net carbon emissions. Our biggest challenge, and what should be a priority for us as companies, is to reach a consensus on net-zero definitions and how the transition should be implemented across the region. It is no question that this will take time and is a mandatory collective effort by all communities in Africa. We have to reverse the damage we have done to our planet, and I am honoured that Standard Chartered is a company that has placed priority in achieving this goal.”

Zeronomics examines the economics of transitioning to a net-zero carbon future. Standard Chartered commissioned this major global study to understand how far companies have come on their journey to decarbonize and it reveals a gulf between words and action. Reaching net-zero carbon emissions by 2050 will be a considerable challenge. Every organisation in every sector has a critical role to play in limiting global warming. Commitment to this agenda must be top of mind for all companies – public and private, large and small – and to succeed they must undergo a major transformation.

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Zeronomics: Global Carbon Tax Key To Pushing Energy Transition Agenda In Africa - Brand SpurZeronomics: Global Carbon Tax Key To Pushing Energy Transition Agenda In Africa - Brand Spur

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Latest News

Strongest first quarter ever: Preliminary results of Deutsche Post DHL Group above market expectations

  • All divisions significantly increased EBIT in first quarter 2021; Group EBIT tripled to around EUR 1.9 billion
  • Free cash flow development continued positive trajectory and improved by more than EUR 1.4 billion to around EUR 1.0 billion
  • CEO Frank Appel: "The start into the new financial year was more dynamic than ever"


SINGAPORE - Media OutReach - 12 April 2021 - Deutsche Post DHL Group has today released preliminary results for the first quarter of 2021 and has raised the outlook for the current financial year. Preliminary operating profit (EBIT) for the first three months improved to around EUR 1.9 billion (Q1 2020: EUR 592 million). The positive development of the group's businesses seen in the fourth quarter 2020 has continued well through the first quarter 2021. In the first three months of the year the B2C shipment volumes remained high in all networks while the recovery in the B2B business continued.

"The start to the new financial year was more dynamic than ever. It proves that we have successfully geared our business to the right growth drivers. One year into the pandemic we experienced in the first quarter 2021 a sustained momentum in e-commerce and a significant stabilization in global trade with increasing air- and sea-freight volumes. Consequently all divisions reported a significant jump in earnings above market expectations. Global trade continues to recover and vaccine distribution is in full swing which makes me very optimistic for the rest of 2021 and beyond," said Frank Appel, CEO of Deutsche Post DHL Group.

All divisions optimally positioned for continuing e-commerce boom and growth in global trade

Express: The division reached an EBIT of around EUR 955 million in the first quarter 2021 compared to EUR 393 million in Q1 2020.

Global Forwarding, Freight: EBIT in Global Forwarding, Freight stood at around EUR 215 million in Q1 2021, clearly above previous year's Q1 of EUR 73 million.

Supply Chain: EBIT at Supply Chain came in at around EUR 165 million in the first quarter 2021 compared to EUR 105 million in Q1 2020.

eCommerce Solutions: eCommerce Solutions recorded a first quarter 2021 EBIT of around EUR 115 million, clearly above last year's Q1 result of EUR 6 million.

Post & Parcel Germany: EBIT in Post & Parcel Germany in Q1 2021 was around EUR 555 million (Q1 2020: EUR 334 million).

Earnings momentum mirrored in positive cash flow development and improved outlook


The continued positive business development is underpinned by a strong cash flow development; free cash flow amounted to around EUR 1.0 billion in the first quarter 2021. In Q1 2020 this figure was still negative at EUR -409 million.

In light of the strong earnings momentum, guidance for 2021 is adjusted as follows:

Group EBIT for 2021 is now expected to be significantly above EUR 5.6 billion (previous forecast: more than EUR 5.6 billion). Equally, the result for the DHL divisions is now seen significantly above EUR 4.5 billion (previous forecast: more than EUR 4.5 billion). EBIT for the Post & Parcel Germany division is no longer expected at around EUR 1.6 billion but above EUR 1.6 billion. The expectation of a Group Functions EBIT of around EUR -0.4 billion remains unchanged. Full year 2021 Free Cash Flow is now expected to be significantly above EUR 2.3 billion (previous forecast: around EUR 2.3 billion).

The Group will introduce a revised detailed guidance with the comprehensive disclosure for Q1 2021 which will be published as planned on May 5, 2021.

Deutsche Post DHL Group

Deutsche Post DHL Group is the world's leading logistic company. The Group connects people and markets and is an enabler of global trade. It aspires to be the first choice for customers, employees and investors worldwide. To this end, Deutsche Post DHL Group is focusing on growth in its profitable core logistics businesses and accelerating the digital transformation in all business divisions. The Group contributes to the world through sustainable business practices, corporate citizenship and environmental activities. By the year 2050, Deutsche Post DHL Group aims to achieve zero emissions logistics.


Deutsche Post DHL Group is home to two strong brands: DHL offers a comprehensive range of parcel and international express service, freight transport, and supply chain management services, as well as e-commerce logistics solutions. Deutsche Post is Europe's leading postal and parcel service provider. Deutsche Post DHL Group employs approximately 570,000 people in over 220 countries and territories worldwide. The Group generated revenues of more than 66 billion Euros in 2020.


The logistics company for the world.

Zeronomics: Global Carbon Tax Key To Pushing Energy Transition Agenda In Africa - Brand Spur
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