The latest insights from the We Mean Business coalition

May 27, 2022

Net-zero transition – latest signals of change (27.05.22)

We Mean Business Coalition

Here are just some of the signals of change from the past week, demonstrating the transition to a resilient and inclusive net-zero economy.

Net-Zero Economy  

First to Davos, where US climate envoy John Kerry announced that the number of companies in the First Movers Coalition has swelled from 35 to 55. Major corporations such as FedEx and Ford Motor Company joined the ranks of companies using their purchasing power to spur investment in nascent solutions such as green hydrogen and fossil-free steel.

New research from Deloitte – launched at Davos – puts a price of $178 trillion USD on climate inaction, if the world stays on its current warming trajectory. Conversely, action to hit net zero by 2050 could add $43 trillion to the global economy over the same period.

And Deloitte isn’t alone in counting the cost of climate change. The Bank of England has conducted climate stress tests on the seven largest UK lenders. This prompted a warning that UK banks and insurers will end up shouldering nearly £340bn of climate related losses by 2050 unless action is taken now to curb emissions. The UK Pensions has also emphasized that UK pension schemes must not ignore risks from climate change.

Scientists this week published research indicating that by cutting methane and other ‘short-lived climate pollutants’ (SLCPs) such as soot, the world could reduce the global heating effect in the near-term alongside longer-term cuts in CO₂ emissions.

Energy

Back to Davos, where International Energy Agency chief Fatih Birol warned that the energy security crisis sparked by the war in Ukraine must not lead to a deeper dependence on fossil fuels. Instead, he urged investment into renewable energy solutions and called on producer countries to export excess capacity.

Renewable energy is hitting new milestones in Germany where for the first time, offshore wind energy has been used to stabilise the country’s electricity system in case of grid fluctuations. The offshore wind farm Riffgrund – operated by Ørsted – will act as a secondary reserve for the grid, meaning that wind power is now just as reliable as power from conventional plants.

Meanwhile, the UK Government has launched a £160m funding programme to enable it to reach its goal to deliver up to 5GW of floating offshore wind capacity in the UK by 2030. The Floating Offshore Wind Manufacturing Investment Scheme (FLOWMIS) will boost capacity by supporting manufacturing and encouraging private investment.

Transport     

According to a new report, in most US states an electric car is now cheaper on a monthly basis than a comparable gasoline car. The analysis looked at variables including financing costs, state taxes and fees, tax credits, and fuel, maintenance and insurance costs.

Meanwhile in Germany, millions of people are expected to take advantage of a government initiative to boost public transport use and soften the blow of the cost-of-living crisis. From 1 June, a €9-a-month ticket scheme will be available on all modes of city and regional transport – available up until the end of August.

Plans are in motion to make the Dover to Calais ferry route into the world’s first zero-carbon shipping corridor through investment in battery powered ships. A declaration of intent signed by three ports and ferry operators P&O, DFDS, and Irish Ferries was put to the UK government on Monday. The move is in line with one of the key COP26 commitments to ‘support the establishment of at least six green maritime corridors by 2025’.

Staying with shipping, the UK government has announced a further £12million of funding to support the development of green maritime technologies, such as zero emission ferries and low carbon shipping fuels. And the International Maritime Organization has broken a decade-long deadlock on how to put a carbon price on shipping emissions in a move welcomed by campaigners. Among the market-based decarbonization measures now on the table are a fuel standard and a global carbon tax for the industry.

Land and Nature 

At Davos, the Taskforce on Nature-related Financial Disclosures (TNFD) announced a series of initiatives to increase engagement with indigenous peoples, local communities and other stakeholders. Building on the success of the Taskforce on Climate-related Financial Disclosures (TCFD), the TNFD aims to shift financial flows away from nature negative outcomes to nature positive ones, with final recommendations due in September 2023.

Also newly launched at Davos is the Global Commission on the Economics of Water. Focused on water security, the group will offer advice on water management worldwide with analysis from an all-star team of scientists, economists, community leaders and policymakers. Interim results are expected to coincide with the UN’s 2023 Water Conference in New York next March.

In Abidjan, the COP15 summit on desertification and its impacts closed with commitments by 196 countries to restore one billion hectares of degraded land between now and 2030. Countries also agreed to enhance drought preparedness, response and resilience.

Five major nature recovery schemes are being launched across England to tackle wildlife loss and climate change. Covering 99,200 hectares of land, the five projects will share £2.4 million from the UK’s Department for Environment, Food and Rural Affairs (Defra).

Built Environment and Heavy Industry  

The Geneva-based International Electrotechnical Commission (IEC) has voted in favour of an update to a household appliance safety standard which may lead to a dramatic reduction in greenhouse gas emissions. The move would allow appliance manufacturers to use hydrocarbon refrigerants for heat pumps and air conditioning units, which have a negligible climate impact when compared with hydrofluorocarbons (HFCs) used today.

In a boost to green steel, Volvo has announced that its heavy electric trucks will soon include ‘fossil-fuel’ steel made with green hydrogen as part of the firm’s plans to slash the carbon footprint of its zero-emissions vehicle range.

A group of six African countries have launched the Africa Green Hydrogen Alliance to advance the development of green hydrogen through public and regulatory policy, capacity building, financing and certification. Founding members include Kenya, South Africa, Namibia, Egypt, Morocco and Mauritania. The initiative could provide clean energy, green jobs, domestic wealth creation and improved air quality across the continent.

Commitments: 

1 company joined EP100:

Grab – Southeast Asian technology company

17 companies joined the SBTi through the science-based target pathway:

Acer Inc. – Taiwanese hardware and electronics corporation

AIB Group Plc – Irish banking services alliance

BioNTech SE – German biotechnology company

Bouygues Telecom – French internet service provider

DARFON Electronics Corp. – Taiwanese keyboard and tech component manufacturer

Frasers Property Development Services (Vietnam) Co., LTD. – Vietnamese real estate and property management company

G4S UK – UK-based security services provider

Guala Closures S.P.A. – Italian manufacturer of special closures for wine and spirits