Heads of firms boasting $1.5tr in revenue highlight urgent need for collaboration with governments to accelerate shift to low carbon economy
CEOs of 50 major global companies representing more than $1.5tr in revenue have urged world leaders to collaborate more closely with the private sector in order to rapidly speed up the transition towards a low carbon economy.
Ahead of next week’s UN Climate Summit in Poland, a joint open letter published yesterday by leading bosses calls for more ambitious policy levers to establish effective carbon pricing mechanisms, shift investment from the high to low carbon economy, and boost societal demand for green products and services.
The intervention, coordinated by the World Economic Forum’s (WEF) Alliance of Climate Action CEOs, has backing from the heads of raft of global business, including AXA, Ørsted, HSBC, BT, Allianz, Carlsberg, UBS, and many others, as well as Paul Polman, who yesterday announced plans to soon step down as Unilever CEO.
The letter states that between them, the companies in the Alliance of Climate Action CEOs cut their emissions by 47 million metric tonnes between 2015 and 2016 – a nine per cent decrease – and are committed to reducing emissions further.
It highlights business-led climate initiatives, such as setting Science-Based Targets, putting internal prices on carbon, reducing energy use, shifting to renewables, and working across value chains to reduce emissions.
However, the CEOs said they wanted to see a clear signal from the COP24 negotiations that governments are willing to step up their own decarbonisation efforts and strengthen their engagement with those businesses that are working to tackle climate change.
The aim of limiting global warming to ‘well below’ 2C, as set out in the Paris Agreement, is “clearly not on track” it states, emphasising that “we need to do more, faster, and together”.
“Climate change is a major threat to our environment, societies and economy, endangering our well-being and prosperity,” the letter states. “But a prosperous, inclusive and low-carbon world is possible. The shift to a low-carbon economy will be positive for communities and workers, future-proofing our businesses and economies while protecting the planet for future generations. By working together, we can accelerate the transition to a low-carbon economy and realise the future that humanity wants and needs.”
Feike Sijbesma, CEO and chairman of the manging board at Royal DSM and also chair of the WEF’s CEO Alliance, said business had an “increasingly vital” role to play in accelerating the shift to a low carbon and climate-resilient economy.
“This will require partnerships with other companies, governments at all levels and civil society,” he said. “It also requires bold leadership and good governance, which will allow long-term creation of shareholder value alongside long-term value for our society. We, as business leaders, are committed to climate action and stand ready to facilitate fast-track solutions to help world leaders deliver on an enhanced and more ambitious action plan to tackle climate change and meet the goals set out at the 2015 Paris Climate Agreement.”
The intervention comes as new research today from CDP, The Climate Group and PwC UK suggests state and regional governments are decarbonising faster than national governments.
The number of subnational governments disclosing their climate data with CDP has risen from 44 in 2015 to 120 across 32 countries.
Moreover, they are decarbonising at a rate of 6.2 per cent a year on a trajectory towards 2050, the research found, just a fraction shy of the rate needed to align with a 2C warming pathway.
In comparison, national governments are deploying plans to cut their emissions by an average of three per cent per year through to 2050, according to the research.
State and regional government disclosed a total of 265 climate targets to CDP covering emissions cuts, renewables, and energy efficiency, of which around 80 per cent were from governments in the Under2 Coalition, the world’s largest collection of state and regions committed to tackling climate change.
Despite these disclosures, however, none of the targets so far have been set in line with a 1.5C warming trajectory, as recommended by the Intergovernmental Panel on Climate Change (IPCC), said Kyra Appleby, global director for cities, states and regions at CDP.
“States and regions are already feeling the physical impacts of climate change, with 40 per cent now acting on both adaptation and mitigation,” she explained. “Many disclosing states and regions are strong on decarbonisation, with those in the US, Germany, Mexico, Spain and UK having more ambitious targets to 2030 than their national governments. To limit the impacts of climate change, states and regions worldwide must sustain and step up their action to reduce emissions, playing their part to limit warming to 1.5C.”