Research from Ramboll and Climate Group says most firms are more willing to foot the bill for sustainable products than they were a year ago
More companies are now prepared to pay a premium for lower emission steel and concrete, according to survey results released by Climate Group and Ramboll at Climate Week NYC has revealed.
The research indicates growing momentum, with 45% of respondents saying they would be willing to pay more for emissions reductions of 25% or higher for steel, while 57% would be willing to do so for emissions reductions exceeding 50%.
For concrete, these numbers were 40% and 49% respectively.
Compared with one year ago 52% of respondents had a higher willingness to pay more, while 34% reported no change in their stance, according to the report titled 鈥楾he Steel and Concrete Transformation: 2024 market outlook on lower emission steel and concrete鈥�.
Steel and concrete emissions are responsible for 15% of global emissions, making their decarbonisation critical to meeting the goals outlined in the Paris Agreement.
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The research is based on more than 250 companies from 42 countries and 21 industries. The companies were surveyed on their current readiness to use and willingness to pay for lower emission steel and concrete.
The report also stated that businesses believe the transition towards lower emission materials is inevitable, with 78% of respondents answering that they expect lower emission steel and concrete will be standard materials for new products or projects within the next decade.
This demonstrates a growing recognition across industries that the transition to lower emission is being driven by regulatory pressures and market demand.
While the outlook is broadly positive, the report also focused on the barriers and solutions to widescale adoption of low carbon materials.
Businesses said while progress is accelerating, the greatest barriers to adoption remain cost (84%), industry conservatism (37%), and lack of knowledge (33%).
In terms of solutions, businesses were clear that governments have a significant role to play in supporting them. Financial levers such as tax incentives, credits, and subsidies (69%), carbon pricing (50%) as well as minimum product standards or embodied carbon limits (43%) were identified as crucial policies for governments to prioritise.
Jen Carson, head of industry of Climate Group, said: 鈥淏usiness leaders are not only calling for change 鈥� they鈥檙e enacting it. This report is a real temperature check of the market. It鈥檚 hugely encouraging to see the appetite is here, now, for organisations to pay a premium for lower emission steel and concrete. Actors across the valuechain - suppliers, governments, and investors - should take note.
鈥滲ut there鈥檚 deep work to be done to speed up progress. It鈥檚 critical that businesses can make the right choices for their operations, and the planet, and switch to lower emission steel and concrete. Governments must listen to their concerns, support their ambition, and act quickly to remove barriers. This way we can unlock corporate demand to drive real sector transformation.鈥�
Green building codes were also seen to be a lever that would drive change, with a third of respondents saying it was crucial.
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