Due to years of shock, including the COVID-19 pandemic and changing geopolitical dynamics, some countries are re-evaluating their trade partnerships and becoming more self-reliant to promote domestic production, through protectionist policies including trade tariffs. For instance, a rise in US tariffs on imports from China, such as a 100% duty on the import of Chinese EVs, and the EU’s carbon border tax are expected to reduce the volume of imports. As per the International Monetary Fund (IMF), new trade restrictions have more than tripled since 2019. Thus, global trade is becoming increasingly fragmented, and this is leading to higher costs due to the erosion of economies of scale. Advancements in generative artificial intelligence (AI) are driving transformative changes in businesses globally by enhancing productivity, streamlining operations and reducing costs. Despite progress, many companies face challenges in the effective and transparent collection and reporting of data across their operations – an essential element in their efforts to reduce emissions. A comprehensive data strategy, supported by digital reporting platforms’ power, can streamline carbon accounting and enable detailed product-level emissions reporting. In addition to the enhancement of companies’ emissions reporting, these innovations have the potential to free up capital, which can be used to invest in clean energy projects and advanced technologies. Accenture estimates $10 trillion in economic value can be unlocked by 2038 by companies adopting gen AI at scale.10 Due to a combination of these technological, economic and political challenges, the eight hard-to abate sectors in scope – which contribute to around 40% of the global Scope 1 and 2 greenhouse gas (GHG) emissions – have seen limited progress towards their net zero goals. These sectors span across production (i.e. steel, cement, aluminium and primary chemicals), energy (i.e. oil and gas) and transport (i.e. aviation, shipping and trucking). Global GHG emissions (Scope 1 and 2) by sector FIGURE 1 3%2% 5% 7% 6% 2% 3% 10%61%OtherThe tracker represents approximately 40% of global GHG emissionsAviation Shipping Trucking Steel Cement Aluminium Oil and gasPrimary chemicals Sources: IEA and IAI. Net-Zero Industry Tracker: 2024 Edition8

Net Zero Industry Tracker 2024