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KPMG: Launches the first edition of the Net Zero Readiness Index

01.11.2021 Share

  • Oil-rich Nordic nation deemed ‘most prepared’ and ‘ready’ to reach Net Zero by 2050
  • First ever Net Zero Readiness Index (‘NZRI’) created to assess countries’ readiness to transition to Net Zero
  • Northern Europe dominates top spots, with UK and Sweden in second and third place
  • A lack of delivery capability is a weak point in global Net Zero emissions ambitions
The oil-rich Nordic nation of Norway has been ranked number one in KPMG’s first-ever Net Zero Readiness Index (NZRI). The report compares the progress of a selection of countries in reducing the greenhouse gas emissions that cause climate change and assesses their preparedness and ability to achieve Net Zero by 2050. Using 103 indicators, recognized as key drivers to achieving Net Zero, the top 25 performing countries and seven ‘countries to watch’ were identified.

Despite being one of the world’s largest oil and gas exporters, Norway topped this year’s NZRI, partly due to private and public investment in renewable energy and electrified transport across the country. In 2016, the Norwegian parliament voted to bring forward its target date for carbon neutrality from 2050 to 2030. However, despite its top ranking, the nation still faces significant decisions over how it continues to tackle challenges in its transition to net zero.

The UK, which is preparing to host the COP26 Climate Summit next month, took overall second place, due in-part to cross-party political support and clear legally-backed targets that have enabled the comparatively swift decarbonization of the country’s power generation sector, but many obstacles remain – particularly on heat and buildings.

Norway’s Nordic neighbor, Sweden, ranked third for being ‘highly ambitious’ and an international advocate for climate policy, green energy and technology. The country’s next step to Net Zero is to reduce its continued reliance on agricultural exports and imports.

Key findings from the Index include

  • Some countries are lagging in adopting Net Zero with only 9 of those surveyed, accounting for approximately 8 percent of global emissions, having legally binding commitments in place. In order to stimulate delivery capability at the sector level, these targets need to be backed by robust strategies, policies and support mechanisms. In most jurisdictions the NZRI preparedness on a national level is mirrored by the level of readiness at the sector level.
  • A lack of delivery capability is a weak point in global Net Zero ambitions. The Index shows that those countries with a Net Zero target in place, either legally binding or policy, demonstrate stronger capability across sectors. The report also shows a correlation between prosperity and the readiness to achieve Net Zero, highlighting the need to escalate the mobilization of support to developing economies.
  • Insights from all surveyed nations show that whilst the global financial sector is increasingly factoring climate risk into its investment and lending decisions, governments have a critical role to play in enhancing access to such financing by creating enabling environments such as sustainable finance strategies, policies and regulatory frameworks.
  • These country insights also help to highlight the importance of political alignment and public support in the success of key decarbonization initiatives.
The NZRI top 25 countries were:

  • Norway
  • United Kingdom
  • Sweden
  • Denmark
  • Germany
  • France
  • Japan
  • Canada
  • New Zealand
  • Italy
  • South Korea
  • Spain
  • Hungary
  • United States of America
  • Singapore
  • Chile
  • Australia
  • Brazil
  • Poland
  • China
  • Malaysia
  • Argentina
  • Mexico
  • Turkey
  • United Arab Emirates

The seven countries to watch were:
  • India
  • Indonesia
  • Nigeria
  • Russia
  • Saudi Arabia
  • South Africa
  • Thailand

The publication of the Net Zero Readiness Index comes ahead of November’s crucial COP26 Climate Summit in Glasgow. The United Nations outlines that greenhouses gases in the atmosphere are at their highest level for three million years, driving a global temperature increase of 0.85 degrees Celsius between 1880 and 2012 and a rise in sea-levels of 19cm. Political and business leaders are becoming increasingly aligned that immediate action is required to stop the catastrophic social, environmental and economic impacts further temperature rises could have on the planet.