COP26: Governments must do more to help businesses tackle climate change, CEOs say
Policymakers must work more closely with corporates if countries are to achieve net-zero greenhouse gas emissions, a group of more than 90 CEOs has said as world leaders arrive in Glasgow for the COP26 climate change summit.
The Alliance of CEO Climate Leaders – which represents some of the world’s biggest companies including Microsoft, Allianz, and AXA – has penned an open letter in which they called on governments to publish Nationally Determined Contributions that “at least” halve global emissions by 2030 and commit to global net-zero by 2050 “underpinned by robust policy roadmaps and interim targets”.
The group, which is hosted by the World Economic Forum (WEF), also urged developed countries to meet and exceed their US$100bn commitment to support developing countries’ efforts to mitigate and adapt to climate change, and ensure the major development finance institutions commit to science-based guidelines across their lending portfolios.
“We, the Alliance of CEO Climate Leaders, stand ready to work side-by-side with governments in a joint public-private effort to accelerate the race to net-zero,” it said.
All members of the Alliance, which employ over eight million people, said they have committed to or have set “Paris-aligned targets” across their value chains, which would “mitigate over 1 gigaton of emissions annually by 2030”.
The group said “we will and must do more, but we can’t do it alone. We need bold climate policy agreements at COP26 to keep a chance to limit the global average temperature increase to 1.5°C”.
Helping to ‘scale up innovations’
In addition to detailed sector-specific policy recommendations set out in an open letter signed by the group in June, it identified three key points that it said would help businesses accelerate emission reductions, scale up innovations and achieve net-zero by 2050. These comprise:
- Eliminating fossil fuel subsidies, cutting tariffs on climate-friendly goods, developing “market-based, meaningful and broadly accepted carbon pricing mechanisms” and “taking adequate measures to ensure a just transition”. The group said an escalating carbon price is a “critical enabler” for greater competitiveness of low-carbon technologies, and that, in parallel, “international cooperation on a global, connected carbon market should ensure broad market access for these low-carbon technologies, while controlling carbon leakage”.
- Supporting and incentivising first-movers (first-to-market products and services) including by helping to “scale existing, proven solutions across value chains, especially in carbon-intensive sectors”, and to develop new technologies. “Governments can make the difference to help scale up and accelerate the transition, including through effective and harmonised laws and regulations that enable a speedy deployment of key technologies and systematic public procurement of low-carbon products,” the group said.
- Investing in climate adaptation: creating resilient cities, supply chains and infrastructure by “scaling natural disaster defences and risk transfer solutions”, and by advancing climate-resilient, sustainable food production and securing water supplies.
Head of climate action at the WEF, Antonia Gawel, said the letter sends a “clear signal” to world leaders to “agree measures that can safeguard our climate”.
Cees ‘t Hart, CEO of Carlsberg Group, and one of the letter’s signatories, said: “We can only achieve our ambitious targets and reach zero carbon by working with others – suppliers, customers, consumers, and critically, governments and policymakers.”
In August, chief adviser to the Alliance and CEO of Boston Consulting Group (BCG), Rich Lesser, told the Financial Times that BCG has independently set rules that prohibit it from doing business with companies “openly indifferent to or in denial of climate change”.
Disclosing climate-related risks
In its June letter, the Alliance urged governments to “compel all businesses to establish credible decarbonisation targets, fully disclose emissions across all scopes using consistent standards, and disclose climate-related risks and opportunities”.
Countries including the UK have made steps towards this. In November 2020, the UK chancellor Rishi Sunak announced measures that mean ‘large listed’ companies, including banks, insurance companies and pension schemes, would need to report their exposure to climate risk using the Task Force on Climate-related Financial Disclosures (TCFD) framework by 2025.
The UK currently leads Europe in terms of company support for the TCFD initiative, according to the latest status report. It ranks joint second with the US globally, with Japan coming top.
In June this year, the Bank of England ran a ‘climate stress test’ for financial institutions to “understand their vulnerability to climate change”, including whether their capital reserves can withstand the financial risks associated with extreme weather events and energy transition.
Members of the Alliance of CEO Climate Leaders will be at COP26. They said they “look forward to discussing with world leaders, government officials and representatives of the NGO community the many ways we can tackle this climate crisis together”.
About Jack Aldane
Jack is a British journalist, cartoonist and podcaster. He graduated from Heythrop College London in 2009 with a BA in philosophy, before living and working in China for three years as a freelance reporter. After training in financial journalism at City University from 2013 to 2014, Jack worked at Bloomberg and Thomson Reuters before moving into editing magazines on global trade and development finance. Shortly after editing opinion writing for UnHerd, he joined the independent think tank ResPublica, where he led a media campaign to change the health and safety requirements around asbestos in UK public buildings. As host and producer of The Booking Club podcast – a conversation series featuring prominent authors and commentators at their favourite restaurants – Jack continues to engage today’s most distinguished thinkers on the biggest problems pertaining to ideology and power in the 21st century. He joined Global Government Forum as its Senior Staff Writer and Community Co-ordinator in 2021.
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