Business calls for clear, bold climate direction from UN Summit
Jen Austin, Policy Director at the We Mean Business coalition
‘Don’t come with a speech, come with a plan’ – That was the clear call to action from UN Secretary-General Antonio Guterres ahead of this month’s UNSG Summit in New York.
The comments underline the urgent need for leaders everywhere to step up on climate, to raise their ambition, and chart a clear path to achieving their stated goals. Guterres’ message is clear: together we can limit warming to 1.5°C, but there is no time left to waste, words must be turned into action plans, so everyone can contribute.
Business leaders are heeding his call. In turn they are adding their voices to his, calling on governments to build on the leadership from the private sector, to support and push the market further and faster with ambitious climate policies, that give them the clarity and confidence to do more. Leadership from both sides is needed to go as fast as possible in our efforts to tackle the growing climate crisis.
To date, nearly 1,000 businesses are already responding by taking bold climate action, having made one or more climate commitments through the We Mean Business coalition partners’ initiatives.
Responding to the latest climate science, a growing number of companies have committed to ensuring their targets are aligned with the Paris Agreement’s goal of limiting global warming to a maximum of 1.5ºC. To date, over 50 companies have now pledged to do so as part of a call-to-action campaign ahead of the summit.
And more than 190 companies are committed to transitioning to 100% renewable electricity with RE100, creating demand for 200 TWh of renewable power per year – more than enough to power Argentina and Portugal.
The ambition and action to tackle climate change is not only limited to companies. A growing number of countries have pledged to implement deep decarbonization strategies to align with the goals of the Paris Agreement and target net-zero emissions by 2050. These include the UK, Norway, New Zealand, Costa Rica, Sweden and France.
And several countries have signaled they will heed Guterres’ call and deliver more ambitious climate policies at the summit in New York. Business leaders, strategists and investors eagerly await what they hope will be clear bold plans.
Forward looking companies recognize the need for bold climate policies to help them accelerate action and create the zero-carbon markets and economies of the future. Below are some of the key policy areas highlighted by businesses as being vital for a rapid zero-carbon transition.
Net-zero emissions by 2050
Leading businesses, as evidenced by the 50 plus businesses who have committed to the 1.5°C Pledge, recognize that climate is a threat to their business and that we all must act swiftly to address it. Building a prosperous, net-zero carbon economy by 2050 requires a transformation of unprecedented pace and scale.
A growing body of analysis and evidence makes it clear that such a transition is achievable, but only with decisive business leadership supported by ambitious government policies. Clear and consistent government policies that drive the full decarbonization of every system of the economy are critical to accelerate progress towards the zero-carbon economy of the future.
These policies must embed the cost of carbon into the financial system, drive innovation and deployment of new technologies, and create clear demand for zero-carbon products and services. Businesses are looking to countries to come to the UN Summit with plans to set clear pathways for a just transition to net-zero greenhouse gas (GHG) emissions by 2050 at the latest, and strengthened Nationally Determined Contributions (NDCs) and 2030 targets in line with that trajectory.
Gilles Vermot Desroches, Senior Vice-President Sustainability at Schneider Electric, a France-based energy management and automation multinational that’s committed to the 1.5°C Pledge, highlighted the need for climate action to radically increase during a recent We Mean Business press conference.
He cited the potential catastrophic consequences should global warming exceed 1.5°C, highlighted by the Intergovernmental Panel on Climate Change (IPCC) report.
“Today it’s a question of acceleration. We have to take into account that the situation is much more complex and we have from the IPCC, and many other actors, the fact that we have to change drastically,” he said.
Following the UK’s recent decision to commit to net-zero emissions by 2050, Coca-Cola European Partners’ Vice President & General Manager Leendert den Hollander said: “A clear sense of direction from the Government’s policies on climate change is vital to allow everyone in business to plan for a zero-carbon future.”
Put a price on carbon
To finance the transition to a zero-carbon economy, markets need full information on climate risks and opportunities, and clear pricing signals and policies that shift global financial flows away from polluting investments and toward zero-carbon products, services and business models.
Globally, hundreds of companies are using an internal carbon price to inform operations and investment decisions as a powerful tool to understand climate risk, reduce emissions and identify low-carbon opportunities, and are supporting and implementing the Task Force on Carbon Related Financial Risk Disclosure’s (TCFD) recommendations.
At the policy level, nearly 40 national and 20 sub-national jurisdictions are participating or preparing for a carbon price with some markets already linked.
More and more companies and investors are recognizing the benefits of climate risk disclosure and setting a meaningful carbon price and many of those companies are now calling on governments to support that with policies. That means phasing out fossil fuel subsidies as soon as possible, implementing meaningful carbon prices, and promoting the implementation of the TCFD recommendations through regulation.
One such company is a Dutch-based multinational global leader in health, nutrition and materials Royal DSM, which as a Carbon Pricing Champion is working with the UN Global Compact to advocate for carbon pricing.
Jeff Turner, VP of Sustainability at DSM, highlights the need for governments to build on the climate action and ambition being demonstrated by the private sector by harnessing the potential of carbon pricing.
“We recognize very clearly that any scenario that we might anticipate can only be delivered with the appropriate policies in place. And in particular, making sure that emissions are firmly embedded into our financial systems through putting a price on carbon,” Turner said.
Support zero-carbon technologies
Policy makers can help companies deliver the technologies that are vital for the zero-carbon transition.
By supporting the deployment and development of technologies such as solar, wind, electric vehicles, battery storage, charging infrastructure and sustainable fuels, governments can empower companies to develop and utilize vital climate solutions.
Carlos Sallé, Senior Vice President of Energy Policies and Climate Change at global power utility Iberdrola, said that bold commitments from policy makers through NDCs will give businesses the confidence to invest in these technologies and solutions.
“The scientists are saying that we have an exponential problem with climate change … so we need exponential solutions for that. This is why we need all the actors involved with urgent actions and also ambitious actions,” Sallé said.
Gabrielle Giner, Head of Environmental Sustainability at BT, echoed the sentiment: “What’s really helpful for business is when policymakers reinforce what we are trying to do”.
“We know that we need to introduce electric vehicles to our fleet. So when the government makes positive announcements and invests in electric vehicles, that’s really helpful for us. It’s the same thing when it comes to looking at a 1.5°C scenario and what that would look like. To see policymakers encouraging that is really helpful.”
Michael Kobori, Vice President of Sustainability at Levi Strauss & Co, said: “What we’re looking for from policymakers is policies that are going to incentivise us to invest in energy efficiency and renewable energy – and basically make renewables a level playing field with fossil fuels. That’s all we need and will invest in.”
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