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Climate action for economic recovery

September 2020

Embedding ambitious climate action at the heart of economic recovery

Dear Ministers,

The COVID-19 pandemic is a global emergency wreaking health and economic devastation, endangering lives and communities everywhere. It is a stark reminder of our economic system’s fragility, exposing deep social inequalities and our interconnected vulnerability to systemic shocks, including climate change.

The emergence of this threat does not reduce the need to respond to the ongoing climate emergency, which remains the most significant long-term threat to economic and social stability.

The science is clear: the longer we delay action on climate at the pace and scale needed, the more complex the impacts will be to mitigate, with disastrous effects on people and the planet.

Government, business and society leaders have a collective responsibility to unite behind the science and act in coordination to keep global warming increase to a maximum of 1.5°C. That means halving greenhouse gas (GHG) emissions in this decade and reaching net-zero emissions by 2050 at the latest.

Even amid the disruption of COVID-19, companies remain committed to climate action: over 990 companies are committed to setting science-based emissions reduction targets, with many companies raising ambition in recent months, including accelerating climate investments and projects as part of their plans.

More than 1,200 major global companies have called on governments to invest in climate action and resilience to create jobs and recover better. By tackling climate and COVID-19 together we can deliver a just and inclusive economic recovery and accelerate the transition to a zero-carbon economy. It makes good business sense.

Studies show that policies that reduce GHG emissions help ensure a more resilient and sustainable labor market, deliver higher short-term returns per dollar spent and lead to increased long-term cost savings compared with traditional fiscal stimulus.

Climate ambition and action are vital tools for companies to enhance resilience, competitiveness, innovation and long-term growth potential. There is evidence that companies that integrate sustainability into their businesses outperform those taking less action even during these turbulent times. Companies with a core focus on sustainability are better positioned to withstand the impacts of systemic shocks, including the inevitable impacts of climate change.

We welcome initial efforts from some governments to develop long-term economic recovery plans that incorporate principles of sustainable growth and climate action to build stronger, more resilient economies.

The Next Generation EU budget aims to achieve a sustainable and fair recovery while supporting ambitious objectives towards climate neutrality by 2050 by channeling 25% of overall spending to climate-related investment. In France, economic bailouts for major companies included conditions linked to climate action. In Japan, economic recovery and stimulus packages reference several environmental measures aimed at accelerating the transition, including incentives for renewable energy. In Canada, measures to support companies impacted by COVID-19 require companies to commit to publish annual climate-related disclosure reports, including how their future operations will support environmental sustainability and national climate goals.

However, much more is needed. We need very clear government action, stimulus packages and related policies that give businesses the clarity and confidence they need to also invest decisively in a zero-carbon recovery. Neither governments nor businesses can do this alone.

To address the climate crisis while boosting economic growth, creating decent jobs, addressing inequality and increasing resilience, we call on leaders to:

  • Prioritize policy and spending to accelerate the transition to an inclusive, just, resilient, zero-carbon economy, including investments in: innovation, renewable energy, zero-carbon transport, zero-carbon materials and built environment, decarbonizing industrial sectors and embedding circular economy, drive sustainable agriculture and food systems, and invest in natural climate solutions.
  • Recognize the vital importance of multilateral institutions and international cooperation to tackle global challenges in line with science.
  • Take firm action to permanently remove market-distorting fossil fuel subsidies, and put a meaningful price on carbon that incentivizes cost-effective, zero-carbon investment.
  • To fully manage climate change risks and ensure that financial markets act accordingly, make climate-related financial disclosure mandatory across the economy in line with the Task Force on Climate-related Financial Disclosures (TCFD) recommendations.
  • Ensure that central banks and financial regulators embed effective climate risk management into financial systems and their operations and shift their portfolio investment to zero-carbon investments.
  • Ensure that finance flows to support climate transition and build resilience in developing countries and vulnerable communities.
  • Support a just, fair and inclusive transition: invest in zero-carbon industries and job creation, while supporting workers and communities through the transition.

Soon to be released analysis commissioned by the We Mean Business coalition shows the GDP and employment benefits of green recovery measures to stimulate renewables, energy efficiency, EVs, or tree planting over traditional stimulus measures by governments (a VAT or sales cut). In all geographies modelled (global, the EU, Germany, Poland, the UK, USA, Japan and India) green recovery measures were found to be more effective at creating jobs, increasing GDP and lowering GHG emissions. (For more information on this analysis, please email Dominic Gogol, Policy Manager at We Mean Business – [email protected]). 

We need clear and consistent government policies and spending that support and incentivize the full decarbonization of every system of the economy to inform businesses and investors, so they too can invest decisively in zero-carbon solutions.

Many companies are shifting their investments to zero-carbon solutions aligned with 1.5°C scenarios. But we need more companies to come on this journey. In doing so they will reduce their risks, build resilience and set themselves on a path towards further success.

To accelerate this, companies receiving long-term public financial assistance should be required to:

  • Adopt science-based approaches to inform company strategy including implementing science-based targets consistent with limiting global average temperature increase to 1.5°C and reaching net-zero emissions by no later than 2050.
  • Integrate climate risk into company disclosures in line with the recommendations of the TCFD.
  • Invest in zero-carbon solutions that create good jobs in their companies and value chains.

A zero-carbon aligned recovery will enable companies to invest and innovate at the pace and scale necessary to create decent jobs, protect health, reduce emissions and increase resilience.

As you prepare for your deliberations in the upcoming Ministerial meetings, we urge you to endorse the findings of this year’s B20 Task Force on Energy, Sustainability and Climate. In its Policy Paper the Task Force proposes several policy recommendations aimed at driving climate action including:  investments in renewables, scaling up nature-based solutions, driving the adoption of carbon pricing and climate disclosure measures, as well as programs to ensure a just transition and transition to a circular economy. 

The decisions you make now will determine the strategic direction of the global economy for years to come. They must enable the world to increase climate action at the necessary speed and scale.

Business is acting to build a zero-carbon economy, and stands ready to work with government leaders at this critical moment to drive the transformational change we need.

Sincerely,

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Harness climate action

as a driver of innovation, competitiveness, risk management and growth.

take action

The transition to a zero carbon economy is inevitable. Now is the time for companies to start preparing for a zero carbon future.

Jill Duggan, Director of The Prince of Wales’s Corporate Leaders Group

This milestone [Paris] Agreement is an important step in ensuring we can maintain quality of life on our planet for future generations.

Neil McArthur, CEO Arcadis

Now businesses are enabled to work together with governments and communities to shape the policies and take the actions necessary to transition to a low carbon future.

Richard Lancaster, CEO of CLP

We are entering an era of system transformation. Business is already playing a leadership role through global collaboration and low carbon partnership initiatives to drive innovation and structural change.

Peter Bakker, President of WBCSD

The global transition to a low-carbon economy is urgent, inevitable, and accelerating faster than we ever believed possible.

Paul Polman, CEO of Unilever and Chairman of the World Business Council for Sustainable Development

We are already not only bending the curve of emissions but actually already in a global consensus about the inevitability of the major shift that will occur in this century.

Christiana Figueres

Investors are interested in our total water stewardship as it is directly linked to our business strategy, long-term growth and company acceptance.

Coca-Cola HBC

In anticipation of changing weather patterns and potential shortages of water, we have made water efficiency a key strategic ambition shaping our product range.

Syngenta

Water risks pose social, environmental and ultimately financial risks. Therefore it is obligatory for all sites, affiliates and operations to include a water risk assessment within their overall risk assessment procedures.

Roche Holding

As corporations make an effort to enhance energy productivity there will be innovation and development of new technologies that will change the way we live and work.

Anirban Ghosh, CSO, Mahindra Group

We find that many of our suppliers can reduce their energy consumption by 5% or more with basic training and implementation of low-cost/no-cost improvement measures.

Clay Nesler, Vice President for Global Energy & Sustainability at Johnson Controls

Reducing energy consumption will be the primary vehicle in achieving our goals. We are very pleased to be the first property company to sign up to EP100, ensuring we will increase our energy productivity for the benefit of our customers.

Robert Noel, Chief Executive, Land Securities

For a company with our global footprint, increasing our energy productivity by two-thirds as we have done since 2002 means that we are spending over US$100 million less in energy bills each year than if our energy productivity had remained constant.

Clay Nesler, Vice President for Global Energy & Sustainability at Johnson Controls

Going 100% renewable will deliver on our consumer promise to deliver brands that are responsibly produced in a world of finite resources.

Marc Engel, Chief Supply Chain Officer, Unilever

Climate change is a huge risk to the long-term supply of safe, high quality ingredients for Nestlé’s products as crop yields fall and production areas shift. We are determined to play our part in taking climate action by purchasing renewable electricity.

Pascal Gréverath, Head of Environmental Sustainability, Nestlé

Renewable energy plays a key role in achieving our ongoing commitment to carbon neutrality, as we aim to use 100% renewable energy to meet our global electricity needs by 2020.

Anthony Cammarata, Managing Director, Goldman Sachs

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, Google

By investing in renewables we can not only reduce our emissions but also future proof the business.

Laurel Peacock, Senior Manager of Sustainability, NRG

We wouldn’t be doing this if it didn’t make business and economic sense… It is the way the market is trending and what our customers are demanding.

Laurel Peacock, Senior Manager of Sustainability, NRG

Our target puts us in a good position vis-à-vis government regulation. We are fully compliant with the UK government’s existing targets, and would be well placed were they to introduce more stringent regulation for companies.

Tom Byrne, Energy Manager at Land Securities

We want to know how exposed a particular business is to the changing context on climate and what it is practically doing to make the changes required; including its targets, timeframes and the extent of its ambition.

Andy Howard, Head of Sustainable Research at Schroders

By doubling the efficiency of our US fleet [over five years], Walmart avoided the emission of nearly 650,000 metric tons of CO², while also saving nearly US$1 billion in the past fiscal year.

Rob Walton, Walmart

Ambitious greenhouse gas reduction goals help our teams rally around low-carbon innovation. Of course knowing that our goals are backed by the current climate research increases buy-in and commitment at all levels of the company.

Alexandra Palt, Chief Sustainability Officer, L’Oreal

We are working towards building a clean energy future. Expanding the share of renewables is key to addressing the chronic energy crisis our country is facing today.

Ramadas Kamath, Executive Vice President and Head – Infrastructure and Sustainability, Infosys

I believe that companies are, above all, agents of transformation. We all work at an intersection of economic, political, social and environmental dimensions and have either positive or negative impacts on all of them.

Guilherme Leal, B Team Leader and one of the founders of Natura Cosméticos

I spend a lot of my time saying to business leaders, we are citizens of the world. We cannot just leave things to the social sector and to the politicians to speak up about these climate change issues. We have as much clout as they, if not more than some of them, and we have the responsibility to speak out. And it makes good business sense.

Richard Branson, Founder, Virgin Group

…we’re working in partnerships even with our competitors, but also with governments and other industries. But to help us get there, we need policymakers to play their role. We need them to give us certainty. We need them to level out the playing field.

Hannah Jones, Vice President Sustainable Business & Innovation, Nike

When it comes to climate change, there is some concern about the regulatory policy system. We’re fearful of sudden government interaction. Nothing happens for four or five years and suddenly you are slammed with a huge regulatory system that you were unprepared for. Better to introduce it carefully and voluntarily now – rather than have it unleashed upon us.

Mike Barry, Director of Sustainable Business, Marks & Spencer

From a policy perspective, General Motors and businesses in general look for long-term certainty and clarity. When you get the market, the customers, our products and policy all aligned, that’s when you can drive true transformation of an industry.

David Tulauskas, Director Sustainability, General Motors

Two fiscal policy tools can drive decarbonisation: carbon pricing and the end of fossil fuel subsidies. Paying a price for emissions while, at the same time, encouraging the activity that causes them is perverse.

Sandrine Dixson-Declève, Director of The Prince of Wales’s Corporate Leaders Group

No CEO would survive if they said climate change is not real

Mike Bloomberg, Former NYS Mayor

Moving capital toward a low-carbon economy protects their beneficiaries’ returns, and is one of the fastest ways to address global warming. Companies take note when investors take action, and when money moves, the world moves too.

Lance Pierce, President of CDP North America

California’s political and business leaders arrived (in Paris) with the clear conviction that climate is not only real, but demands action. Our experience offers a wealth of practical lessons for how to make rapid, sustainable progress toward the clean energy future.

Tony Earley, Chairman, CEO and President, PG&E

Science shows that climate change will reduce food productivity and food security at the same time our world’s population is growing and requiring us to feed more people with fewer natural resources.

John Bryant, CEO, Kellogg Company

As a global food company, we recognize the significant impacts climate change can have on our business if left unaddressed.

Ken Powell, CEO, General Mills

(Climate change) is absolutely a threat. And that’s why we’re doing all that we’re doing today.

Barry Parkin, CSO, Mars

I think what we’ve shown already in North Carolina is that when you provide the incentives – the investments tax credits for solar; when you have the renewable energy portfolio — it works.

Letitia Webster, Senior Director, VF

Low-carbon, sustainable investments are key to our future.

Tom DiNapoli, New York State Comptroller

We want the underlying companies in our ($300 billion) portfolio to be aligned with the transition to a low-carbon global economy.

Anne Simpson, Global Governance Investment Director, CalPERS

If you can do one thing for me today, please, never refer to clean energy as “alternative energy” again.

Michael Liebreich, Founder & Chairman of Bloomberg New Energy Finance Advisory Board

Getting to the Paris Agreement was the easy component, it meant setting the starting line. Now we have to turn those intentions into implemented activities and projects.

Christiana Figueres, Executive Secretary, UNFCCC

There seems to be a tendency to believe that now that the Paris Agreement is done, it is now up to governments. But the real action starts now. The business community and civil society need to push governments so that they will keep this agreement.

Ban Ki-Moon, Secretary-General, United Nations

The once unthinkable has now become unstoppable. This train is moving. It started at the Paris station, it has to go and move.

Ban Ki-Moon, Secretary-General, United Nations

The entry into force of the Paris Agreement just ten months after COP21 is a defining moment for the global economy.

Paul Polman, CEO of Unilever and Chairman of the World Business Council for Sustainable Development

The global transition to a low-carbon economy is urgent, inevitable, and accelerating faster than we ever believed possible.

Paul Polman, CEO of Unilever and Chairman of the World Business Council for Sustainable Development

We are entering an era of system transformation. Business is already playing a leadership role through global collaboration and low carbon partnership initiatives to drive innovation and structural change.

Peter Bakker, President of the World Business Council for Sustainable Development

Now businesses are enabled to work together with governments and communities to shape the policies and take the actions necessary to transition to a low carbon future.

Richard Lancaster, CEO of CLP

This milestone Paris Agreement is an important step in ensuring we can maintain quality of life on our planet for future generations.

Neil McArthur, CEO Arcadis

The significance of the Paris Agreement and its universal impact cannot be underestimated. The transition to a zero carbon economy is inevitable. Now is the time for companies to start preparing for a zero carbon future.

Jill Duggan, Director of The Prince of Wales’s Corporate Leaders Group

What the Paris Agreement means for business

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