It’s time for business to back the Powering Past Coal AllianceNigel Topping, CEO of the We Mean Business coalition
Business stands ready to partner with governments to help deliver the vision of the Paris Agreement. But in order to successfully navigate the potential disruption created by the low-carbon transition, companies need to know that governments have a clear destination.
By giving a strong steer, in the form of loud and clear policy signals, governments can help businesses to fully engage and deliver the scale and speed of decarbonization needed to limit global warming to well below 2°C.
One of these clear policy signals came to the fore last month in Bonn, Germany, during the annual gathering of policymakers, forward-looking companies and non-state actors known as the Conference of the Parties (COP23).
At COP23, the UK and Canadian governments launched the Powering Past Coal Alliance. Bringing together a group of 25+ countries, states and regions, this alliance sends a powerful message that coal’s time has passed.
The declaration states that the health effects of air pollution from burning coal, including respiratory diseases and premature deaths, impose massive costs in both human and economic terms. Recent analysis has found that more than 800,000 people die each year around the world from the pollution generated by burning coal. While one study in the UK found that deaths related to emissions from coal cost the country’s economy between £2.47bn and £7.15bn in a single year.
Now is the time for business to harness the level of ambition shown by governments, to help drive real change in the global economy, protect the health of vulnerable people and help limit global warming. The Alliance invites companies to sign the Powering Past Coal Declaration, to give governments their support, with a clear commitment to powering their operations without coal.
Many forward-looking businesses are already embracing the shift away from coal and other fossil fuels, by committing to shift to 100% renewable power. RE100, from The Climate Group in partnership with CDP, is a collaborative global initiative uniting more than 118 influential businesses committed to 100% renewable electricity.
Together, they are creating more than 155 terawatt-hours (TWh) in demand for renewable electricity annually – about as much as it takes to power Malaysia.
Companies like Apple, BMW, BT, Coca-Cola European Partners, General Motors, Microsoft Corporation, Google and Unilever have all committed to going 100% renewable and it’s proving to be good for business. These companies are part of a group that outperformed companies in the Bloomberg World Index by 9.6% and the Dow Jones Sustainability World Index by 19.6%, according to CDP data.
“Electricity costs are one of the largest components of our operating expenses at our data centers, and having a long-term stable cost of renewable power provides protection against price swings in energy,” Urs Hölzle, Senior Vice President, Technical Infrastructure at Google, said.
Many of these companies are looking beyond their own operations and actively helping to push the global market for renewables forward. For example, HSBC recently announced it will provide US$100 billion in sustainable financing and investment by 2025, while also committing to reduce exposure to thermal coal and transition to 100% renewable electricity.
“We plan on working closely with RE100, other corporates, governments and regulators to open up renewable energy markets and support the decentralization of power generation across our operational centers,” Andy Maguire, Group Chief Operating Officer, HSBC Holdings said. “This will enable HSBC and other corporates to develop PPAs globally and support the transition to a low-carbon economy and 2-degree world.”
“Enel’s engagement in climate action is an integral part of the group’s business strategy, as shown by our pledge to become CO2-free by 2050 and our focus on the group’s renewable growth,” Enel Group CEO Francesco Starace said.
A just transition
Such collaboration between government and business can be a force for real and positive change. But as the transition away from coal gathers pace, it’s vital to ensure that workers’ rights are protected.
Companies are increasingly seeing the need to consider the rights of workers in the energy transition. Those who do not, risk facing the growing economic headwinds that often accompany higher unemployment, such as increased taxes and stagnating growth.
“Part of this just transition is to invest more money in stimulating the right transition,” CEO of Unilever and B Team leader Paul Polman said.
“We have to be sensitive to the companies that are highly carbon intensive, we have to be very sensitive to the people who work in highly carbon intensive industries. We certainly cannot run away from something, especially as these people have provided us with noble energy, and done a very difficult job,” he said.
Following the launch of the Alliance, B-Team leader and General Secretary of the International Trade Union Confederation Sharan Burrow said the transition needs to secure decent, low-emission jobs, while upholding rights, protecting vulnerable workers and communities and leaving no one behind.
To help steer the global energy system away from coal towards clean and affordable energy, while ensuring a just transition, requires business to get behind the Powering Past Coal Alliance.