Businesses will need to adapt and get ahead of the curve on climate change to survive, with experts and corporate leaders warning that those that stand still will be under threat.

Key points: An estimated 1,700 major firms around the world make their investment decisions based on pricing carbon

An estimated 1,700 major firms around the world make their investment decisions based on pricing carbon Several large Australian companies are making moves to slash their carbon emissions, including Atlassian, ANZ and Rio Tinto

Several large Australian companies are making moves to slash their carbon emissions, including Atlassian, ANZ and Rio Tinto ASX-listed companies in the clean energy sector have outperformed the ASX 200 index by more than 70 per cent

Deloitte's partner for energy transition and renewables, John O'Brien, said most businesses need to start grappling with what to do about climate change, if they have not already.

"If you want to have a business that's going to be running in 10 years, then you need to be thinking about how you're going to plan that strategy to be in business," Mr O'Brien told The Business.

"If you're taking no [climate] action now, and the world is changing fast, companies that don't change with the evolving world are effectively not going to survive."

Some of Australia's biggest businesses are already working to cut their carbon emissions.

Software firm Atlassian announced this week it will become a net zero carbon emission business by 2050 and is calling on other Australian businesses to step up.

"If the Government is not going to do anything, business has got to have a voice on it," co-CEO Mike Cannon-Brookes said.

ANZ joined others on the "RE100" list, committing to 100 per cent renewable energy in its buildings.

"Moving to 100 per cent renewable energy for our electricity by 2025 not only makes good business sense, it's good for the planet and reflects our ongoing support for the goals of the Paris Climate Agreement," said ANZ group general manager property Kate Langan.

Anglo-Australian mining giant Rio Tinto has announced it is working with China's biggest steel producer, China Baowu Steel Group, to develop and implement ways to cut their carbon emissions along the steel value chain.

Those are the kind of steps Mr O'Brien said companies need to be taking.

"The world is changing and that's not going to stop," he said.

"Companies which stand still are going to be in trouble. Companies which move more quickly are going to be able to seize more opportunities."

Investor power

Much of the push for business to move quickly on climate change initiatives has come from investors.

"It started with activist investors, it's now mainstream investors demanding climate risk assessments and then a clear plan to reduce the climate risk of that business," Mr O'Brien explained.

"It's starting with the multinationals and it will come down within the next year or two and the nationals will be under this pressure too."

Roy Maslen, the chief investment officer for Australian equities at AllianceBernstein, a global fund with $US560 billion worth of assets under management, knows the push all too well.

"We're certainly finding some of our clients are increasingly focused on climate risks in their portfolio," he told The Business.

"They believe careful analysis of that will actually help them improve investment returns in their core investment strategies."

Last year, AllianceBernstein began an investment strategy focused on being carbon neutral, while delivering returns to shareholders.

It is a growing trend. A 2017 Harvard Business Review study found 1,400 companies around the world make their investment decisions based on pricing carbon. Mr Maslen estimates that this number has now risen to 1,700.

"Companies that aren't taking those actions are more risky and ultimately less attractive investments," Mr Maslen explained.

Economic benefits

The push for climate action is also seeing the value of companies at the forefront of green technology rise.

Six years ago, 93 ASX-listed companies in the renewable energy and storage space, collated by Deloitte into its CleanTech Index, were worth a combined $8.5 billion.

That figure grew to $50.9 billion in 2019.

The gains on this index have been more than three times larger than those for the broader ASX 200 over the last five years.

Deloitte's index of listed "clean tech" firms has significantly outperformed the ASX 200. ( Supplied: Deloitte )

Business investment advisor Matt Drum helps businesses offset their emissions.

He said going green is not just a smart move to attract investment, it is also about gaining a competitive edge.

One client dramatically reduced their power costs when they moved away from LPG.

"They've moved to almost a carbon neutral fuel source, a biomass boiler," he observed.

"They've been able to save about 80,000 tonnes of carbon dioxide equivalent for the 20-year life of the project. They're saving 60 to 70 per cent of their input costs for thermal heat."

He said there are also other benefits to addressing climate concerns.

"There's definitely a reputational risk associated with being seen as not interested or inactive."