At WEF leaders must face climate risks and harness bold actionThe We Mean Business coalition
As business and government leaders gather for the World Economic Forum (WEF) in Davos, Switzerland (21-24 January, 2020), the urgent need to tackle climate change will be top of the agenda. This year’s annual WEF Global Risks report sees environmental concerns dominating the top spots, amid the backdrop of ongoing wildfires in Australia and recent flooding in Indonesia.
2020 marks a crucial turning point in the race to tackle climate change. This is the year for rapidly scaling up the speed of climate action and harnessing the opportunities of transitioning to the zero-carbon economy.
For forward-looking governments and businesses already committed, it’s the year for turning ambitious climate targets into cast-iron action plans that are delivering results. For those yet to make bold commitments, it’s the year to step up to avoid being left behind.
All companies attending Davos have been asked to commit to achieving net-zero carbon emissions by 2050 or earlier, in a letter sent to company leaders by Klaus Schwab, the Forum’s Founder and Executive Chairman.
Business is moving
The number of companies making bold climate commitments is growing rapidly, with over 1,140 leading companies already signed up to one or more of the We Mean Business coalition’s partner initiatives. These companies represent US$20.1 trillion in market cap, equivalent to around one quarter of the global GDP and the annual emissions of India.
Over 770 of these companies are committing to setting science-based targets, with over 170 in line with the goal of limiting warming to a maximum of 1.5ºC and reaching net-zero emissions by 2050 at the latest. These include International Airlines Group (IAG) – owner of Spanish airline Iberia and British Airways, car rental firm Europcar Mobility Group and Indian conglomerate Mahindra Group.
These companies are joined by a group of investors managing close to US$4 trillion in assets who have committed to converting their investment portfolios to net-zero emissions by 2050 through the UN-convened Net Zero Asset Owner Alliance. And just this month, the world’s largest asset manager BlackRock outlined new plans to incorporate climate risk into its investment process, including offloading $500m in shares of companies that generate a quarter or more of revenue from thermal coal.
These companies and investors are leading the way in creating a positive feedback loop known as an “ambition loop” — with government policies and private sector leadership reinforcing each other and together taking climate action to the next level.
However, it’s not enough. The number of companies committing to bold climate action needs to exponentially increase, as does the speed of delivering against existing targets, in order to outpace the growing threat of climate change.
Governments are moving
Governments, both national and sub-national, have a critical role to play in enabling business to help deliver the zero-carbon economy of the future. By setting policies and targets in line with a 1.5°C trajectory, governments give business the clarity and confidence to invest decisively in accelerating the transition.
Business groups and investors, representing thousands of companies and tens of trillions of dollars of market cap and assets under management, are calling for governments to strengthen policies and targets to match that ambition.
An increasing number of governments already recognize the economic benefits of rapidly transitioning towards a zero-carbon economy. To date, 17 countries have a net-zero 2050 targets, either in law or in policy documents. This is now bolstered by the European Council’s endorsement of achieving a climate neutral EU by 2050, and Canada’s commitment to net-zero by 2050 – via the Ambition Alliance led by the Chilean COP25 Presidency.
Meanwhile, 114 nations have signaled their intention to submit an enhanced climate action plan during 2020. This ratcheting of ambition is vital to achieve the transition and all governments can harness the opportunities of the zero-carbon economy by providing this strong leadership.
In the coming months, countries that haven’t yet done so can show real leadership by:
- Committing to achieve a just transition to economy-wide net-zero emissions by 2050 at the latest.
- Strengthening nationally determined contributions and 2030 targets in line with a 1.5ºC trajectory.
- And laying out national policies, plans and laws to achieve those targets.