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Bold climate policy drives decisive business action

The shift to a global net zero economy has begun, but strong policies are needed to accelerate the transition and reap the benefits.

Fossil to Clean

With bold business and political leadership, we can scale clean energy and end our reliance on fossil fuels.

COP28 marked the beginning of the end of the fossil fuel era and the first time in history that we have a global agreement to transition away from all fossil fuels in line with science.

Leading businesses came to COP28 with a call for the phase out of fossil fuels, the tripling of renewable capacity and doubling of energy efficiency. Their voices were heard loud and clear.

Over 200 businesses representing more than $1.5 trillion in global annual revenue have signed an open letter urging national governments to address the primary cause of climate change: burning fossil fuels.

See the letter and list of signatories

Find out about the Fossil to Clean campaign

Read our full COP28 statement

Bringing an ambitious and coordinated business voice to COP28.

COP28 Business Pavilion

Accelerating towards a Global Net Zero Economy

Now is the time for all countries to commit and course correct to the 1.5°C trajectory, translate global goals into national policies and deliver climate action by system. This must include urgently reducing fossil fuel production and consumption this decade alongside scaling up clean energy, as emphasized by the IPCC 6th Assessment Report.

Delivering on these goals requires policy alignment across the whole of government, sector specific incentives and regulations, and an overall strong focus on accelerating a just and equitable transition from fossil fuels to clean solutions.

Accelerating action towards 1.5°C in this way will help drive sustainable economic growth, build resilience and solidarity, and create new jobs as part of a just and inclusive transition.

While domestic policies directly drive investment and behaviour change, the international process coordinated through the UN Framework Convention on Climate Change (UNFCCC) plays a vital role in encouraging greater ambition from each country, including through increasing transparency of policy developments across countries.

The next round of Nationally Determined Contributions (NDCs), to be submitted by 2025, is of critical importance if the world is to realign towards a net-zero trajectory. Governments must work with business to develop more ambitious NDCs, as well as detailed implementation plans and individual policies that drive systems transformation across systems.

Business calls on government to:

Adopt strengthened, high quality Nationally Determined Contributions (NDCs) by 2025 in line with a 1.5°C trajectory and the latest science to halve global emissions by 2030. These should include clear commitments on phasing out fossil fuels, supporting the decarbonization of the global energy system in the 2040s and a strong emphasis on providing affordable and reliable clean energy services.

Commit to achieving economy-wide net-zero emissions in a just and inclusive manner by 2050 at the latest and reversing nature loss by 2030.

Develop policies, plans and laws across the economy, to swiftly implement national NDC and sectoral net zero targets, tackle fossil fuel use, and ensure a just and inclusive transition.

Accelerate the clean energy transition by committing to reaching 100% decarbonized power systems, by 2035 in advanced economies and by 2040 for other countries, at the latest.

Accelerate the clean energy transition by setting targets and timelines for the phase out of unabated fossil fuels (see point C.4) in line with 1.5°C, supported by national plans and policies to ensure a just transition for affected workers and communities. Wealthier countries have the responsibility to be first movers and support other countries in their effort.

Accelerate the clean energy transition by eliminating all fossil fuel subsidies by 2025 and implementing plans to repurpose those towards energy efficiency, renewable energy, and other measures to support a people-centred and equitable clean energy transition.

Accelerate the clean energy transition by committing to ending financing of new investment in coal fired power generation, and new oil and gas exploration and production.

Accelerate the clean energy transition by investing in sustainable carbon removal solutions, in particular natural climate solutions, that drive ambitious climate action and contribute towards a nature positive global economy.

Accelerate the clean energy transition by ensuring appropriate carbon pricing signals by putting a meaningful price on carbon that reflects the full costs of climate change and de-risks investment in key sectors.

Support countries in the Global South in diversifying their economies and developing 1.5°C aligned pathways, including by delivering on the commitment by developed countries of at least $100B per year in support of climate action by developing countries to drive sustainable investment, and agree on an ambitious post-2025 climate finance goal.

 

Invest in sustainable carbon removal solutions, in particular natural climate solutions, that drive ambitious climate action and contribute towards a nature positive global economy.

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FINANCING THE TRANSITION

To finance the transition away from fossil fuels and encourage investment in net zero aligned solutions, markets need full information on climate risks and opportunities, clear pricing signals and policies, and public climate finance support. Global finance institutions must be urgently reformed to ensure that public and private money is redirected efficiently to help countries accelerate towards a green and net zero economy that stimulates net-zero products, services and business models.

Business calls on government to:

Make climate-related financial disclosure mandatory for corporations, in line with the latest ISSB standards.

Set out national action plans in 2022 to eliminate all fossil fuel subsidies by 2025 in a manner that supports a just and equitable clean energy transition.

Invest in carbon markets that drive climate ambition while ensuring environmental integrity and avoiding double counting.

Require companies and financial institutions to put in place climate transition plans for near-term, credible action.

Encourage ESG-related considerations in investor risk assessments.

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Accelerating the Transition from Fossil Fuels to Clean Energy

Achieving the Paris Agreement objectives, halving global emissions by 2030 and achieving a just and inclusive transition to the net-zero economy requires an urgent and rapid transition away from fossil fuels. Despite the remarkable uptake of renewable energy, fossil fuels still account for almost three-quarters of energy demand and emissions keep rising. This underscores the need for action this decade to redirect investment away from fossil fuels and accelerate the deployment of zero and low-carbon fuels and technologies at scale, ensuring they displace fossil fuels.

BUSINESS CALLS ON GOVERNMENT TO:

Commit to reaching 100% decarbonized power systems by 2035 in advanced economies and by 2040 for other countries, at the latest. invest in capacity building that supports a rapid and just transition.

Set targets and timelines for the phase out of unabated fossil fuels in line with 1.5°C supported by national plans and policies to ensure a just transition for affected workers and communities. Wealthier countries as historic emitters have the responsibility to be first movers. Develop plans to phase out coal-fired power generation by 2030 for advanced economies, and 2040 for other countries, at the latest.

Eliminate all fossil fuel subsidies by 2025 and repurpose those towards energy efficiency, renewable energy, and other measures to support a people-centred and equitable clean energy transition.

Accelerate the deployment of energy efficiency technologies and solutions in buildings, industry and transport, and integrate energy efficiency criteria into public procurement rules.

Massively scale up investment in developing and modernizing power grids to improve balancing and resilience as the system becomes increasingly dependent on variable renewable power sources.

Commit to public procurement at the national and local level and stimulate corporate procurement of renewables.

Streamline permitting and planning processes to facilitate the roll-out of new renewable energy projects and infrastructure, ensuring that biodiversity and social effects are given sufficient weight in the decision process.

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The Road to Clean Transport

The way we move people and goods needs radical change. While the transition to zero emission vehicles, ships and airplanes is accelerating, it is not happening fast enough- oil products still account for over 90% of the sector’s energy consumption. Much more is needed to achieve zero emission multi-modal freight transport. A holistic approach with policies and programs that drive innovation, enable uptake of solutions, and scale infrastructure can get us there. The decarbonization of the power sector through urgent action to phase down fossil fuels is vital to ensure net-zero transport.

BUSINESS CALLS ON GOVERNMENT TO:

Implement increasingly stringent emission standards aligned with the 1.5°C pathway for all modes of transport.

Continue to promote fuel efficiency and the shift to low and zero emission transport modes.

Commit to 100% sales of zero emission vehicles (ZEVs) for new light-duty vehicles by 2035, and by 2040 for new heavy-duty vehicles, at the latest, with clear interim targets to support progress towards these goals.

Adopt coherent policies across transport, energy and the built environment, and work with business to accelerate investment in and deployment of infrastructure for reliable and seamless electric vehicle (EV) charging that is accessible to all.

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A Pathway for Industry

Fossil fuels remain the dominant energy source for heavy industry, which is responsible for over 30% of global emissions. Steel, cement and chemicals are the top emitting sectors in heavy industry and among the most challenging to decarbonize, given their reliance on fossil fuels for feedstock and energy use, and the high level of CO2 emissions from the industrial processes themselves, especially cement production.

Inter-connected decarbonization strategies exist that address switching from fossil fuels to renewables and hydrogen for energy use and heat generation, increasing energy efficiency, increasing demand for low carbon materials and products and deployment of circular economy approaches, and scaling carbon sequestration methods and other innovative approaches to reduce emissions from production processes. These strategies are being deployed in several sectors and regions with the right policy support. However, for these sectors to truly get to net zero emissions by 2050, investment decisions and policy actions need to rapidly scale in this decade to avoid emissions lock in and to spur the innovations needed to decarbonize heavy industry.

Business calls on governments to:

Put medium to long term sectoral decarbonization roadmaps in place with interim targets and milestones to accelerate action and sectoral transition away from fossil fuel dependency in the 2020s and towards net-zero emissions by 2050 at the latest.

Drive demand for fossil-fuel free and circular materials via sustainable public procurement policies and creation of lead markets.

Provide financing and R&D support for piloting and scaling deployment of zero emissions technologies such as DRI using green hydrogen to produce green steel or carbon capture and storage methods to accelerate greater public and private sector investment and drive innovation at scale

Implement policies and regulations such as carbon contracts for differences to overcome the green cost premium that businesses face for production of low-CO2 steel, cement and chemicals, and promote creation of standards to identify and label green materials to avoid greenwashing claims.

Combine ambitious carbon pricing instruments with focused regulatory action to drive and de-risk investment in hard-to-abate sectors, with provisions for preventing unfair competition and carbon leakage.

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A Sustainable Built Environment

The Built Environment is responsible for almost 40% of global energy-related GHG emissions and 50% of global resource extraction. Its demands on natural resources accelerate climate change, and inefficient buildings negatively impact human health and wellbeing. Governments must target a 50% reduction in CO2 emissions from the built environment by 2030 in order to reach net zero by 2050. They must implement bold national and local roadmaps and policies that address whole life carbon emissions of existing and new assets. Radical collaboration with all stakeholders will be critical to accelerate action in this decade, particularly to reduce emissions from energy use and dependence on fossil fuels in buildings, in order to halve emissions from this sector by 2030.

Business calls on governments to:

Develop national and sub-national decarbonization and resilience roadmaps aiming to address whole lifecycle emissions and promote multi-stakeholder collaboration with cities, regions, businesses and civil society actors to accelerate action.

Implement mandatory, performance-based building codes and planning standards addressing whole life carbon and lifecycle emissions for new buildings as well as major refurbishments, as well as measures to enhance building resilience.

Increase deep renovation rates of the existing building stock to 3% per year by 2030 and beyond, focusing on reducing oil and gas use in heating and cooling systems, enhancing energy efficiency, and on low carbon insulation and building materials.

Establish data tracking standards and systems to track and assess progress towards decarbonization and reduction of lifecycle emissions.

Align public procurement standards to incentivize low carbon solutions along the value chain and build zero carbon, circular and resilient buildings and infrastructure.

Accelerate deployment of public funding for innovation and R&D projects, for workforce development and to de-risk private sector investment in the built environment.

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Protecting Land and Nature

Biodiversity loss and environmental degradation are both accelerated by climate change and exacerbate its impacts. Addressing climate change strengthens nature’s ability to absorb carbon and adapt to climate impacts. Nature-based climate solutions only receive 5% of global public finance dedicated to mitigation measures, despite the potential to abate 30% of greenhouse gases by 2030 to achieve a 1.5°C pathway. The interlinked crises of climate change and biodiversity loss are most effectively solved if addressed in tandem. Resilient economies and thriving businesses also rely on nature as more than half of the world’s GDP is moderately or highly dependent on nature. 

Nature-based climate solutions should promote measures to protect, improve management and restore forest and other biomes aligned with the Natural Climate Solutions (NCS) mitigation hierarchy. Initiatives should strive to achieve positive impacts on biodiversity and contribute to food security,  livelihoods, and other ecosystem services. 

See our integrated policy recommendations with Business for Nature for further detail. 

BUSINESS CALLS ON GOVERNMENT TO:

Deliver updated Nationally Determined Contributions (NDCs) that establish bold targets for food systems transformation and reflect the ambition  of the Glasgow Leaders Declaration on Forests and Land Use on Forests and Land Use to reverse forest loss and land degradation by 2030.

Eliminate commodity-driven deforestation by 2025 through trade policies developed in collaboration between producer and demand-side countries.

Recognize the important role of public subsidies in harmful land-use change and ecosystem degradation by reforming $520 billion in agricultural subsidies by 2030 through alignment with climate and biodiversity objectives.

Ensure 30% of international climate finance is channeled to high quality, nature-based climate solutions by 2025 to reflect their potential to provide 30% of the emissions reductions and removals needed to limit global warming to 1.5°C.

Align national climate policies and plans with commitments under the Convention on Biodiversity by integrating targets within (NDCs), National Adaptation Plans (NAPs) and National Biodiversity Strategies and Action Plans (NBSAPs) to ensure policy coherence and adequate finance supports the transition towards a nature positive world by 2030.

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