No country in the G20 is decarbonising quickly enough to maintain a safe climate, according to new analysis by professional services firm PwC.

This year’s Net Zero Economy Index shows progress on decarbonisation is falling alarmingly short of what is required to limit global warming to 1.5°C above pre-industrial levels, with nine of 20 major economies showing increases in carbon intensity over the last year.

Last year’s Index stated that going forward, a global decarbonisation rate of 12.9 per cent was required to limit warming to 1.5°C, however in 2021, the global rate was just 0.5 per cent, while the average in the G20 – who collectively account for around 80 per cent of global energy-related emissions – was just 0.2 per cent, its lowest level for two decades.

This has pushed the global rate of decarbonisation now needed to 15.2 per cent year-on-year to meet the climate goals adopted in the Paris Agreement and endorsed at COP26 last year – in spite of any future shocks, such as the ongoing energy crisis.

This ambitious rate, which is 11 times faster than the global average achieved over the past two decades, is further complicated by the current geopolitical and economic context, leading to real risk on future progress towards emissions reduction.

Marisa Savage, PwC Bermuda ESG leader, said: “Businesses are continuing to drive forward the climate agenda through the decarbonisation of their own organisations, improving the performance and resilience of supply chains, and exerting their influence over others.”

For example, PwC said, more than 3,000 businesses and financial institutions are working with the Science Based Targets initiative to reduce their emissions by setting science-based targets.

Ms Savage added: “PwC has committed to be net zero by 2030, and the SBTi have validated the PwC network’s emissions reduction targets.

“Like our clients, we need to build trust with our stakeholders and deliver sustained outcomes – and tackling our climate impact is critical to both.”

PwC’s Net Zero Economy Index tracks the progress G20 countries have made to reduce energy-related CO2 emissions and decarbonise their economies. This is done by measuring levels of energy consumption relative to GDP, and the carbon content of that energy.

Looking closer at some of the world’s leading economies, China achieved a 2.8 per cent reduction in carbon intensity, while the US (0.1), India (2.9), Japan (0.6), Germany (1.7) and France (1.4) all saw increases, in part due to the recovery from the pandemic.

The best performing country was South Africa (-4.6 per cent), ahead of Australia (-3.3), China (-2.8), Turkey (-2.7), Canada (-2.2), Saudi Arabia (-1.8), South Korea (-1.6) and the UK (-1.5).

The report notes that there is no single pathway to Net Zero with each country moving at a different pace by different means. Ultimately however, all nations must accelerate action, with a pressing need to reduce global carbon intensity by 77 per cent by 2030.

Encouragingly, the report said, there is growing worldwide consensus by governments, investors, and businesses on the need for large-scale decarbonisation and an acceleration in the switch to renewable forms of energy.

While policymakers are under pressure to ensure a secure and affordable energy supply, there is an opportunity to use disrupters to strengthen the business case for net zero investment.

The rise in energy prices and threats to supply has created a rush to fossil fuels in the short term; but strengthen the case for investment in renewable energy capacity for the long term.

Similarly, the financial case for energy efficiency has strengthened, especially in high energy-consuming and hard to abate sectors. Businesses will be looking at ways to consume less, while using energy more effectively, signalling a possible turning point in how we think about energy, the report said.

Emma Cox, global climate leader, PwC UK, said: “The message from our Net Zero Economy Index is clear: we need to significantly accelerate the rate of decarbonisation at pace and at scale if we are to stand any chance of limiting global warming to 1.5°C.”