The Transition to Net Zero: An Investment Opportunity for the Private Sector

Government action is key to unlocking private sector investment, according to Bain & Company in its report, “Business Breakthrough Barometer 2024.” This report gathers insights from leaders of some of the world’s largest companies on the current state of and need for government action to expedite private investment toward net-zero emissions. The survey was conducted following COP29, where the current state of sustainable investments was a central topic.

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The report led Bain & Company to several conclusions about the current landscape of climate investment. For instance, they estimate that without long-term, investment-friendly policies, the next wave of large-scale investments is at risk. Additionally, 91% of business leaders surveyed view the transition to net-zero emissions as an investment opportunity. However, only 1% believe the transition is on track in the 11 sectors evaluated, which are responsible for 70% of global emissions. Two-thirds of companies cite the lack of strong investment arguments and the slow expansion of infrastructure as the most pressing obstacles to accelerating the transition.

The report also underscores the importance of collaboration between countries. 85% of respondents believe that international coordination among governments is critical to achieving a net-zero transition.

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The report establishes the need for long-term industrial policies that include streamlining permits, mandating action, direct infrastructure investment, and enhanced international coordination to increase private sector investment. Nine out of ten companies indicate they are willing to invest more if governments implement policies that address sector-specific barriers.

Ibon García, partner at Bain & Company and leader of the firm’s sustainability practice in Spain, commented:
“This year’s barometer sends a clear message: it is essential to have a coordinated plan that includes tax incentives and emission reduction reports tailored to industrial realities. A common, transparent, adaptable, and financially viable regulatory framework will be critical to accelerating change.”