Chief executives from 78 multinational corporations have co-signed an open letter that calls on the world’s political leaders to set more ambitious targets to tackle the climate crisis.
The Alliance of CEO Climate Leaders, a World Economic Forum-convened group from a range of industries including energy, cement, consumer goods and financial services worth US$2.4 trillion in sales, said in a statement published on Thursday that governments needed to do more to reduce greenhouse gas emissions, with clearer policies that align countries with the Paris Agreement.
The Paris accord, signed in 2015, requires global warming to be capped at 1.5 degrees Celsius by the end of the century to avoid the worst impacts of climate change, including prolonged heat waves, rising sea levels, crop failure and disease outbreaks. At the current rate of emissions, the world is on its way to warming by about three degrees.
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The Alliance stated in its letter that the business world was stepping up climate action through initiatives such as the Race to Zero, a United Nations-backed campaign to shift corporates to net-zero emissions by 2050, and wanted to work with governments to “supercharge” climate action with “bold and courageous” commitments and policies.
Members of the Alliance that signed the letter include the chief executives of shipping giant Maersk, nuclear fuel miner Orano, agribusiness Syngenta, energy major Engie, chemicals multinational BASF, consumer goods firm PepsiCo, fashion brand H&M and finance group Standard Chartered Bank.
To decarbonise at the speed and scale required to achieve net-zero by 2050 at the latest, we urgently need transformative policy change.
Alliance of CEO Climate Leaders in an open letter to governments
Some members of the Alliance, including Dow, Coca-Cola, HSBC, and Microsoft, did not sign the letter.
The letter coincides with the G7 Summit, a meeting of seven of the world’s biggest industrialised economies that have convened in the United Kingdom this week to discuss the Covid-19 vaccinations, the economy, taxes on business, and climate change.
According to Oxfam’s analysis of research by the Swiss Re Institute, published on Monday, the climate crisis will hit the economies of the G7 countries, which include the United States, UK, Japan, France, Germany, Italy, and Canada, twice as hard as the Covid-19 pandemic, if they do not curb emissions.
Finance ministers of the G7 countries said on Saturday that they would back a move to make climate-related disclosures mandatory for banks, and for such disclosures to made with “consistent and decision-useful information”, a move that they said was necessary to mobilise the trillions needed to being about a net-zero world.
The Alliance called on governments of G7 countries and others to accelerate the transition to a low-carbon economy ahead of the 26th UN Climate Change Conference of the Parties (COP26) in Glasgow in November.
The group called on world leaders to publish 1.5C-aligned targets to halve emissions by 2030, and reach net-zero by 2050, combined with detailed policy roadmaps and interim targets.
It also urged wealthy economies to honour a commitment made in 2009 to help developing countries adapt to climate change. A report published in January by non-profit CARE International, found that wealthy nations had over-reported the US$100 billion in annual funding they had pledged to developing countries for climate adaptation.
The Alliance also called for rules that compel businesses to set “credible” decarbonisation targets and fully disclose emissions of all types, and disclose climate-related risks.
Dominic Waughray, managing director of World Economic Forum, told Eco-Business that he expected the number of signatories to grow in the run-up to COP26, which would “send a strong political signal” to world leaders at the summit.
The open letter emerges two months after the launch of Climate Action 100+, an investor-led initiative that tracks the net-zero commitments of the world’s biggest corporate emitters, and determines whether they are in alignment with the Paris Agreement.
Among those found to have issues meeting their climate commitments include members of the Alliance. Chemicals giant Bayer, for example, has not disclosed a decarbonisation strategy, and consumer goods firm Nestlé has not aligned future capital expenditures with the Paris Agreement’s emissions pathway.
Chuck Baclagon, Asia finance campaigner for environmental campaign group 350.org, said that it was “about time” that the corporate sector realised the need for urgent climate action, adding that net-zero targets are “far from sufficient” considering that people are already experiencing climate impacts right now.
“It is also ironic, and blatant greenwashing, that the signatories include banks and insurers who continue to do business with the fossil fuel industry — such as Standard Chartered Bank, which have invested over US$24 billion in fossil fuels since the Paris Agreement,” said Baclagon, whose organisation has campaigned for Standard Chartered to stop funding coal projects.
Dutch multinational bank ING, which is also part of the Alliance, was targeted by a group of NGOs in April for funding new coal-fired power plants in Indonesia.
“Funding any fossil fuel allows the industry to continue emitting carbon — setting the world back in terms of our Paris climate goals,” he said.
“We agree that governments must turn their commitments into real climate actions, but so do these corporations. To limit the warming of the Earth to 1.5 degrees and avoid the worst of the climate crisis, we must immediately keep all fossil fuels in the ground. We call on the signatories to start walking the talk, by ruling out fossil fuels in their investments and operations.”