2019 Climate Action Summit: Businesses Are Pulling Governments toward a Net Zero Economy

Authors

• David Wei

  Former Managing Director, Climate and Nature, BSR

At the 2019 UN Climate Action Summit, the global community expected national leaders to announce new, more ambitious commitments to combat climate change. While the Summit included a handful of positive announcements—Indian Prime Minister Modi announced a new target of 450 gigawatts of non-fossil energy, German Chancellor Merkel launched a EUR 50 billion climate action plan, several countries increased their contributions to climate finance, and 66 countries committed to net zero emissions by 2050—the ambition of these announcements does not match the urgency that climate change demands.

This lack of ambition arrived as the world is demanding action: millions of students and supporters marched last Friday across the world in the Global Climate Strike, and report after report this year—on biodiversity, on land, on climate adaptation, on oceans—has underscored the urgency to act.

Our goals for the next, decisive decade will determine whether we succeed or fail. To fulfill the promise of the Paris Agreement, nations must deliver much stronger climate targets ahead of next year’s pivotal COP26. At the Summit, national leaders failed to change our path towards over 3°C of warming by the end of this century—and yet, climate action from the private sector accelerated.

The Summit underscored that business must forge ahead with building our net zero economy. From the stark gap between national announcements and business action, I heard three messages:

1. To national leaders and governments: Businesses are showing you how to build the net zero economy. Without improved short-term targets and policies, a promise to reach net zero by 2050 is not enough.
2. To businesses: The argument that governments must go first is truly dead. Companies must generate long-term value for their investors, win the war for talented millennials who demand purpose, and attract consumers who demand sustainable products.
3. To businesses: You may already work hard to reduce your operational emissions and manage climate risks. You may already engage your suppliers and make energy-efficient products for your customers. But if you do not actively influence governments to set more ambitious climate policies, it will not be enough.

Indeed, it is in the private sector where we see momentum for climate action growing with increasing urgency. Five years ago, the Science Based Targets initiative did not exist; today, 647 companies are committed to targets in line with the Paris Agreement. RE100 did not exist; today, over 190 companies are committed to sourcing 100 percent renewable electricity. The We Mean Business coalition, co-founded by BSR, did not exist; today, its Take Action platform features over a thousand companies taking climate action. All in the time of a single election cycle.

Just as building a net zero economy requires the whole of government, building a net zero value chain requires every company department.

At the Summit, business action broadened to more industries. Allianz CEO Oliver Bäte announced a Net Zero Asset Alliance, representing US$2.4 trillion in assets. The Getting to Zero Coalition, for which BSR’s Clean Cargo is a knowledge partner, aims to deploy commercially viable zero emission maritime shipping by 2030. Representatives of the steel, aluminum, and cement industries spoke to their contributions to a net zero pathway. Danone CEO Emmanuel Faber launched the One Planet Business for Biodiversity coalition at a time when one million species are under threat of extinction.

Climate action also deepened within companies: 87 companies with a combined market capitalization of US$2.3 trillion committed to setting climate targets across their operations and value chains aligned with limiting warming to 1.5°C and reaching net zero emissions by 2050.

At BSR, we see how deep climate action can go. Sustainability professionals are working with their operations counterparts to decarbonize production, with their procurement counterparts to decarbonize supply chains, with their risk management counterparts to manage climate risks, and with their finance counterparts to set up climate innovation funds. Just as building a net zero economy requires the whole of government, building a net zero value chain requires every company department.

These companies realize that climate mitigation and adaptation will bring tremendous opportunities to them or to their competitors. Today, it is unfortunate that businesses understand this more clearly than national governments do. But businesses can help to close this gap by calling for more ambitious climate policies by COP26 in November 2020.