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According to analysts at the Boston Consulting Group (BCG), the global defense industry is facing mounting pressure to decarbonize. Militaries use a huge amount of energy. This is why they need to set emission reduction targets.
"Compared with most other sectors, the global defense industry remains at an early stage of its journey to reduce greenhouse gas emissions," BCG noted. However, in the near future, the military sector will have to go green and embrace the new reality of environmental sustainability.
"The global defense industry’s contribution to worldwide CO2 emissions could soar from 2% today to 25% by 2050- unless contractors work more aggressively to reduce their carbon footprints," the agency said. Defense companies that refuse to implement environmental strategies in their work will face pressure from most investors. Currently, climate issues are of high priority to many large market players, especially when it comes to picking up an investment strategy.
Nowadays, many organizations that manage assets worth $43 trillion are expected to reach zero emissions by 2050. This requirement also applies to the defense industry. Contractors are sure to take into account the environmental awareness of the defense companies before investing money. So, the military sector is up for the challenge. "Most leading defense companies we studied have begun efforts to cut what are known as Scope 1 and Scope 2 emissions- those related to their operations and energy usage, respectively," market strategists at BCG added. Therefore, those defense companies that will transform into greener businesses will attract more investors in the future.
Today, climate change is one of the most acute topics for governments around the globe. Many governments are taking appropriate measures aimed at mitigating climate change. Lloyd Austin, the US Secretary of Defense, called the climate crisis an existential threat. "We face all kinds of threats in our line of work, but few of them truly deserve to be called existential." His opinion is shared across the pond. The UK military sector also stressed the importance of going green. Apart from that, the UK Ministry of Defence and the US Department of Defense have already declared that they are ready to help their nations achieve net-zero emissions by 2050.
BCG believes that the different companies in the military industry need to find an effective way to become carbon neutral. "In aerospace, the path to net zero will focus on alterations in engines and fuels. Competition among both defense and civilian companies is intense. Militaries are expected to follow the civilian sector by introducing more EVs and hybrids," BCG said.
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