Businesses are acting on climate. Paired with clear ambitious government policies, we can achieve a prosperous future in which global warming is limited to 1.5ºC.
The latest science makes it clear that reaching net-zero emissions by 2050 is possible and necessary to achieve the Paris Agreement’s 1.5ºC goal. Recent studies and real economy trends demonstrate that a just transition to a resilient, zero-carbon future will have many benefits for our economies and societies.
Building a prosperous, net-zero economy by 2050 requires a transformation of unprecedented pace and scale. A growing body of evidence makes it clear that such a transition is achievable, but only with decisive business leadership supported by ambitious government policies.
Clear and consistent government policies that drive the full decarbonization of every system of the economy are critical to accelerate progress towards the zero-carbon economies of the future. These positively reinforcing Ambition Loops between governments and businesses will help drive the system-wide change needed to achieve the goals of the Paris Agreement and create a resilient, just, zero-carbon future, faster.
Businesses around the world are calling for governments to enact stronger policies and commit to raising their ambition in key multilateral moments and national policymaking processes. These commitments give businesses the clarity and confidence they need to invest in the technologies and markets for the net-zero economy.
Net-zero by 2050
BOLD CLIMATE POLICY DRIVES BUSINESS ACTION
The transition to a net-zero economy has begun. It’s achievable and brings significant benefits. Businesses are acting. But it’s not happening fast enough. Policies that give clarity and certainty will encourage more businesses to make the necessary investments to achieve bold climate targets. This in turn leads to more ambitious policies, therefore creating a positive policy-business ambition loop. Together we can limit global warming to 1.5ºC and create a net-zero, just, and climate resilient economy.
ECONOMIES FOR PEOPLE AND NATURE
More and more countries are stepping up with enhanced nationally determined contributions (NDCs) and commitments to reach net-zero emissions by 2050. Now is the time for all countries to commit to the 1.5ºC trajectory, translate global commitments to policies and plans at the regional and national level, and deliver meaningful climate action.
Ensuring a green recovery from COVID-19 will help to drive sustainable economic growth as it builds resilience and creates new jobs as part of a just transition.
This is a unique opportunity for governments, businesses and civil society to collaborate and show global solidarity in addressing both the COVID-19 and climate crises.
Business calls on governments to:
- Commit to achieving economy-wide net-zero emissions by 2050 at the latest and reversing nature loss by 2030.
- Put forward strengthened, high quality NDCs in line with a 1.5ºC trajectory to halve global emissions by 2030.
- Develop policies, implementation plans and laws across the economy that reach NDC and net-zero targets and are nature positive.
- Develop policies that ensure a just transition that is fair, respects the needs of all people and countries, and builds a more inclusive economy.
500+ companies across 40+ sectors and countries have committed to align their emission reductions with the 1.5ºC target, through the Business Ambition for 1.5°C This includes companies from high-emitting sectors such as cement makers️ LafargeHolcim and India’s Dalmia Cement, plus many of the world’s largest companies by market cap, including Microsoft, Apple, and Walmart.
100+ companies are committed to reach net-zero by 2040 with The Climate Pledge, including Amazon, Colgate-Palmolive, PepsiCo and Visa.
A growing number of leading companies are engaging their supply chain to accelerate emission reductions, while over 1,000 Small and Medium-Sized Enterprises (SMEs) that make up the supply chains of larger companies have committed to the SME Climate Hub.
Business calls for ambitious policy
In the US, 400+ companies called on the US government to adopt the ambitious and attainable target of cutting emissions by at least 50% below 2005 levels by 2030.
In the European Union, a call from 200+ CEOs in 2020 helped increase ambition in the NDC, laying the foundation for implementing the Green Deal and ambition in sectoral strategies.
In Japan, almost 180 companies called on the government to reduce emissions by at least 50% below 2013 levels by 2030.
Green recovery is good economic recovery
New analysis, commissioned by the We Mean Business coalition and conducted by Cambridge Econometrics, shows that green recovery plans boost income, employment and GDP better than return-to-normal stimulus measures, with the added benefit of reducing emissions.
700+ companies globally have signed a number of open letters calling on world leaders to ensure that economic stimulus packages tackle both the impacts of the coronavirus and the ongoing climate crisis.
4,500+ health professionals and more than 350 organizations, representing at least 40 million health workers worldwide, urged the leaders of the G20 to ensure a green recovery.
Zero-carbon technology and innovation has already created millions of jobs worldwide – renewable energy alone employs over 11 million people – and with proper participatory planning we can ensure that no one is left behind in the transition.
Just transition policy recommendations
Develop just transition plans coupled with robust policies to create an enabling environment for sustainable business, based on the ILO Guidelines for a Just Transition. This may include establishing a Just Transition Commission as in Scotland, which recently published practical recommendations on how to fundamentally transform its economy and reach net-zero emissions by 2045.
Demonstrate global solidarity by supporting emerging economies to set up national just transition funds, similar to those being established in the US and EU. These will help finance the closure of polluting industries, reskill workers and invest in clean transport, heat and electricity.
Encourage businesses to commit to the Business Pledge for Just Transition and Decent Green Jobs. Existing leaders are Ørsted, Iberdrola, Acciona, Engie and Enel with 230,000 direct employees and millions of workers in their supply chains. Ørsted’s landmark agreement aims to establish hundreds of new decent green jobs, good labor standards and training for all offshore wind project in the US.
FINANCING THE TRANSITION
To finance the transition, markets need three things: full information on climate risks and opportunities, clear pricing signals and policies, and public climate finance support. Right now, it is important that money spent to help countries recover from the COVID-19 pandemic goes towards a green recovery. This will shift global financial flows away from polluting investments and stimulate zero-carbon products, services and business models.
Business calls on governments to:
- Deliver on the commitment by developed countries of at least $100B per year in support of climate action by developing countries.
- Put a meaningful price on carbon and support robust Article 6 rules that ensure environmental integrity and avoid double counting.
- Make climate-related financial disclosure mandatory for corporations, in line with the TCFD recommendations.
Signals of change
Leading finance firms with more than $70 trillion assets have signed up to the newly launched Glasgow Financial Alliance for Net Zero, which brings together initiatives covering asset managers, asset owners, banks, and soon insurers. Climate Action 100+released a Net-Zero Company Benchmark to help investors evaluate the ambition and action in tackling climate change of 159 systemically important carbon-emitting companies across a range of sectors.
There are now 61 carbon pricing initiatives in place or scheduled for implementation, consisting of 31 emission trading systems and 30 carbon taxes, covering 12 gigatons CO2e or about 22% of global GHG emissions. Carbon pricing and the removal of fossil fuel subsidies are effective if combined with a policy mix that tackles other key areas, such as increasing energy efficiency and the use of renewable energy across sectors, addresses the demand side and reinvests revenues in society.
More than 2,000 organizations and 78 countries support the Task-force on Climate-related Financial Disclosure (TCFD) recommendations.
New Zealand is planning to make disclosures in line with the TCFD recommendations mandatory for publicly listed companies and large insurers, banks and investment managers by 2023, while the UK has set out a Roadmap towards mandatory climate-related disclosures by 2023. and several other countries are considering similar measures including the US, Japan and France.
A NEW ENERGY MARKET
Cutting emissions by more than 50% by 2030 and achieving a zero-carbon economy requires radical transformation across all sectors. The power sector has to lead the global transition to a zero emissions economy. Fossil fuels are still the dominant source of energy in our economies. Despite remarkable uptake of renewable energy, divestment from fossil fuels is not happening fast enough.
Business calls on governments to:
- End coal financing immediately, end coal exports by 2025, and phase out the use of coal by 2030 for OECD countries and 2040 for non-OECD countries at the latest.
- Lay out roadmaps by 2022 to phase out ALL fossil fuel subsidies and financing by 2025 at the latest.
- Invest in energy efficiency solutions and a smart grid infrastructure that integrates renewable energy.
- Commit to public procurement and stimulate corporate procurement of renewable energy.
- Commit to reaching 100% clean energy and power systems by 2040 or soon thereafter.
+300 companies are now committed to reaching 100% renewable electricity through the RE100 initiative, led by The Climate Group, in partnership with CDP. RE100 members are now creating demand for 315 TWh of renewable electricity annually – enough to power a medium sized country.
50+ RE100 members have already achieved 100% renewable electricity consumption, and 65 member are using over 90%.
+50 electric utilities have committed to set or have already had approved a science-based emission reduction target, including Europe’s Enel, Iberdrola and Ørsted, NRG Energy in the U.S. and The Tata Power Company in India.
2020 saw a 7% rise in electricity generation from renewable sources and the share of renewables in global electricity generation jumped to 29% in 2020, up from 27% in 2019, according to the IEA.
THE ROAD TO CLEAN TRANSPORT
The transition from polluting internal-combustion engine cars to zero-emission light-passenger vehicles is accelerating, but not fast enough. Governments can harness the momentum and support both the automotive industry and consumers to utilize the available technologies for rapid decarbonization.
Businesses call for governments to:
- Implement increasingly stringent emission standards for all road vehicles.
- Continue to promote fuel efficiency and the shift from cars and trucks to low emission transport modes.
- Commit to 100% sales of zero emission vehicles (ZEVs) by 2035 for new light-duty vehicles.
- Invest in infrastructure for reliable and seamless EV charging for all.
Over 100 of the world’s leading companies are making commitments across over 80 markets to transition their fleets to EV and install EV charging for staff and customers by 2030, through The Climate Group’s EV100 These include global logistics company Deutsche Post DHL Group, Chinese internet giant Baidu and the world’s largest consumer goods group Unilever.
EV100 members deployed 169,000 EVs in 2020, more than twice the number in the previous year. The total number of vehicles committed to be EV by 2030 as part of EV100 commitments has risen by 80% to 4.8 million.
Virtually all the world’s major automakers have committed to electrify part or all their fleet and are investing to transition their operations today, including VW and Daimler.
A growing number of automakers have committed to align their emission reductions with 5ºC science-based targets, including Ford, Volvo and BMW.
Watch this space for sections on Built Environment, Industry and Nature-Based Solutions to be added soon.
Business is calling for action
BUSINESS IS CALLING FOR AMBITIOUS, LONG-TERM, CLEAR POLICIES FROM GOVERNMENTS
Businesses around the world are calling for governments to set bold, ambitious climate targets and enact stronger, clear policies to achieve them. These targets and policies give businesses the clarity and confidence they need to invest in and build the technologies, markets, and business models of the zero-carbon future.
- In the US, 408 companies and investors, collectively representing over $4 trillion in annual revenue and employing over 7 million US workers across all 50 states, called for an NDC of at least 50% emission reduction by 2030 (April 2021)
- In Japan, more than 170 Japanese companies called for an NDC of at least 50% emission reduction by 2030 compared to 2013 levels (March 2021).
- In Japan, 50 RE100 companies headquartered or with operations in the country and more than 150 Japanese companies called for a stronger renewable energy target of 50% of the energy mix by 2030 (October 2020 and April 2021).
- In the European Union, more than 170 CEOs called on the EU to raise the bloc’s NDC ambition to at least 55% by 2030 (September 2020).
- In the UK, over 200 companies called on the British government to deliver a clean, just recovery in line with the net-zero by 2050 commitment (June 2020).
- In the US, over 75 U.S. businesses met with a bipartisan group of U.S. federal lawmakers to call on Congress to pass meaningful climate legislation, including a price on carbon (May 2019).
- In the European Union, CEOs from more than 50 businesses, investors and business networks called on the EU to endorse a long-term decarbonisation strategy to achieve climate neutrality by 2050 (May 2019).
- In the UK, 120 companies called on the UK government to legislate for a net-zero by 2050 economy (May 2019).
- In Germany, big businesses called on the government to rapidly speed up the shift to electric vehicles (March 2019).
- In Japan, more than 90 Japanese businesses called for their government to commit to net-zero domestic emissions by 2050 (November 2018).
- Globally, the We Mean Business coalition has called on governments to support ambitious policies across key systems for a just transition to a net-zero emissions global economy by 2050 at the UNFCCC, G7 and G20.
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WMB POLICY RESOURCES
- The Ambition Loop
The Ambition Loop report by United Nations Global Compact, the We Mean Business coalition and World Resources Institute showcases specific examples where strong national policy measures built upon business leadership are spurring additional investments and climate action. Where policies are clear and strong, businesses are stepping up to do more and the pace of change is accelerating.
- Climate Ambition Benchmarks
The Climate Ambition Benchmarks project is a joint initiative of the ClimateWorks Foundation, the European Climate Foundation and the We Mean Business coalition. The project seeks to break down the overall goal of limiting global warming to no more than 1.5°C, into a set of intermediate sectoral benchmarks, to demonstrate what can and must be achieved in key systems and geographies to be on track.
- Forging a carbon-neutral heavy industry by 2050: How Europe can seize the opportunity
This briefing synthesises some of the latest thinking around the challenges and opportunities involved in decarbonising European heavy industry. It brings together the key findings from recent reports on industrial transformation, such as those by Material Economics and the Energy Transitions Commission, on what is technologically possible and financially feasible.
- WMB Policy Z-Card: COP25
Leaders at the 25th UN Climate Change Conference (COP25) must urgently set clear policies and targets to help companies deliver the zero-carbon transition at the pace required. Read our infographic summary of what business is calling for at COP25.