The latest insights from the We Mean Business coalition

March 3, 2023

Net zero transition – the latest signals of change (03.03.23)

We Mean Business Coalition

Here are the latest Signals of Change, demonstrating the transition to a resilient and inclusive net zero economy.

Net Zero Economy

New research from the International Energy Agency (IEA) shows that global CO2 emissions may be reaching a plateau. There was a rise of just under 1% in emissions from energy – by far the largest source of emissions – in 2022. The energy crisis didn’t result in the major increase in emissions initially feared, “thanks to the outstanding growth of renewables, electric vehicles (EVs), heat pumps and energy-efficient technologies,” IEA Executive Director, Fatih Birol said. Across EU countries, CO2 emissions fell by 2.5%.

The UK government’s Transition Plan Taskforce (TPT) has called on corporates to publish their climate transition action plans this year, with an emphasis on protecting nature and ensuring a just transition. The TPT’s co-chair and Aviva Group CEO, Amanda Blanc said that “momentum is building on transition plans, but this will only be sustained by firm action, a will to change and our ability to think beyond our own businesses.”

Former Mastercard CEO and B Team Leader, Ajay Banga has been nominated as the next President of the World Bank by US President Joe Biden. With the institution facing growing calls to broaden its remit to tackle both climate mitigation and adaptation, Biden spoke of the Wall Street veteran’s “critical experience” in mobilizing private money to “tackle the most urgent challenges of our time, including climate change.”

Energy

L’Oréal Group has signed a power purchase agreement with EDF, who will provide the firm with renewable energy from two new solar parks. With a combined installed capacity of 27 MW, the parks will be capable of producing the equivalent of 25% of the beauty company’s electricity consumption in France. L’Oréal plans to use 100% renewable energy at all its sites by 2025.

In Zambia, Copperbelt Energy Corporation (CEC) has opened a 33 MW solar plant in Kitwe district. The $22 million plant has enough annual capacity to power 10,000 Zambian homes. CEC has plans to commission another plant in the district by the end of the year, and wants to develop an eventual installed capacity of 200 MW of renewable energy in Zambia by 2024.

And Engie has called on European policymakers to boost supply chain self-sufficiency in renewable energy. Catherine MacGregor, CEO at the French utility company said that “Europe has to think about protecting or making sure its industry flourishes,” adding that incentives within the USA’s Inflation Reduction Act (IRA) were already causing an “acceleration” in her firm’s activity in the region.

Transport

Uber has announced plans to introduce 25,000 electric vehicles (EVs) to its fleet in India amid a push for electrification of transport in the country. The company will buy the EVs from Tata Motors, India’s biggest electric carmaker. Uber, which has 300,000 vehicles in India, has set a 2040 target for 100% of its rides to be in zero-emission vehicles, public transport or with micro-mobility.

In Dhaka, Bangladesh, locals are making use of new low-emission transport by taking the recently inaugurated metro line. The first section of the MRT Line-6, built by the government-owned Dhaka Mass Transit Company Limited, with financial support from the Japanese government, opened in December. The first metro rail route is expected to be completed by the end of the year, and could reduce annual emissions of CO2 equivalent by 500,000 tonnes by 2050, while creating thousands of jobs.

And the US Postal Service has ordered more than 9,000 EVs from Ford, under a $10 billion project to electrify its fleet. The Ford E-Transit Battery EVs are part of plans to electrify 75% of its vans – over 60,000 vehicles – during the next five years.

Land & Nature

Today on World Wildlife Day, Carlsberg, BrewDog and a number of football clubs have joined companies showing their support for nature by removing the animals from their logos. The #WorldWithoutNature campaign, organized by WWF each year, highlights ways that businesses and individuals can play a part in protecting and restoring the natural environment.

To Brazil, where in a race to halt destruction of the native forests and vegetation that cover almost 80% of its territory, the region of Pará is implementing an ambitious bioeconomy plan. The aim is to generate jobs and preserve the environment by increasing support for local sustainable businesses that use practices derived from traditional and indigenous knowledge. The $232 million ‘PlanBio’ was announced at COP27, in the hope of turning Pará – currently Brazil’s main emitter of CO2 – into a carbon-neutral state. Natura &Co are one of the multinationals already working with local cooperatives in the area.

And companies including Nestlé and General Mills have shared insights into how their growing use of regenerative farming methods is supporting soil protection. The US IRA, passed last year, earmarked nearly $20 billion over five years to support environmental benefits in agriculture and forestry, including sequestering greenhouse gas emissions in soil. General Mills has more than 235,000 acres engaged in regenerative agriculture and aims to increase that to one million acres by 2030 – about 30% of its farming supply chain. Nestlé aims to source 20% of its key ingredients from regenerative agriculture by 2025 and half by 2030.

Built Environment & Heavy Industry

In Germany, the government has shared plans to ban gas and oil heating in new or renovated buildings from next year. A new law is expected that will require new buildings to get two-thirds of their heating from renewable sources, with new and enhanced subsidies for clean energy installations like heat pumps expected to be part of the package.

To Japan, where the country’s largest steelmaker – Nippon Steel – is exploring a hydrogen-powered green steel project outside its home market that could cost around $733 million. The company, which plans to cut emissions by 30% by the end of the decade, is considering Australia and Brazil, among others as locations for the site. Steelmaking and other industrial emissions currently account for almost 40% of Japan’s CO2 footprint.

Lastly, green building technology startup BlocPower has raised over $150 million to retrofit tens of thousands of US dwellings with climate-friendly appliances. The funds – raised from investors including the Microsoft Climate Innovation Fund and Credit Suisse – will aid the expansion of BlocPower’s software, which identifies buildings in need of retrofits and recommends the best technologies to lower their emissions.

Company Commitments

13 companies committed to set science-based targets through the SBTi Net Zero pathway:

ACCA (Association of Chartered Certified Accountants) – UK-based educational institution

Akplas – Turkish plastics and components producer

Cement Australia Pty Ltd – Australian cement company

Comvita Limited – New Zealand-based food company

Cymmetrik (Shenzhen) Printing Co., Ltd. – Taiwanese packaging company

Hong Kong Science & Technology Parks Corporation – Hong Kong-based real estate company

Kekén – Mexican meat producer

Match Group – US-based software company

Natural Power Consultants Ltd – UK-based energy consultancy

Pegasystems Inc – US-based software company