‘We’re losing money to climate change’: Corporates push for fossil fuels phase-out ahead of COP28

An open letter from 131 companies representing nearly US$1 trillion in global annual revenue calls on world leaders to phase out unabated fossil fuels. Climate action could boost global GDP by 4 per cent by 2030, said the group, which includes Indian conglomerates Mahindra Group and Godrej.

A Mahindra Group production line
A Mahindra Group vehicle production line. Mahindra, which has pledged to use only renewable energy by 2040, is one of the few Asian businesses to sign a pledge calling on global leaders to phase out fossil fuels. Image: Mahindra

A mixture of major multinational brands and smaller businesses has signed an open letter to world leaders in the run-up to the COP28 climate talks, calling for a full phase-out of fossil fuels.

“Our businesses are feeling the impacts and cost of increasing extreme weather events resulting from climate change,” the group said in the open letter, stressing the need to cut emissions by adopting clean solutions and reducing fossil fuel use to cap global heating at 1.5°C, in line with the Paris Agreement.

The group of 131 firms, worth US$987 billion in combined annual revenue, is made up of mainly Western firms operating in territories less dependent on fossil fuels, but includes a handful of Asian businesses, including Indian conglomerates Mahindra Group and Godrej, and some African businesses.

Brands worth at least US$1 billion, including consumers good giants Unilever, Danone and Nestlé, chemicals firm Bayer, brewer Heineken, tech company Hewlett-Packard, automaker Volvo and furniture retailer IKEA, are among the signatories.

Global emissions continue to rise because we haven’t addressed the primary cause of climate change: the burning of fossil fuels.

Open letter from businesses to heads of state attending COP28

The group called on COP28 negotiators to agree on a full phase-out of unabated fossil fuels to halve emissions this decade, which it said could boost global gross domestic product (GDP) by 4 per cent.

It is also pushing for governments to support fossil fuel phase-out with plans to ensure a just transition for affected workers, and for rich countries to support emerging economies in setting 1.5°C-aligned economic pathways. However, it noted that financial assistance for the Global South must not exacerbate unsustainable sovereign debt.

The business collective also called for a “meaningful” price on carbon that reflects the full costs of climate change and a reform of fossil fuels subsidies so that clean energy growth could be “turbocharged”.

The group wants renewable electricity capacity to be tripled and the rate of deployment of energy efficiency measures to be doubled by 2030, so that energy systems can be completely decarbonised in the Global North by 2035 and by 2040 in the Global South.

The letter was coordinated by We Mean Business Coalition, a collective of non-profits including CDP, World Business Council for Sustainable Development and Climate Group, through the Fossil to Clean campaign.

Some energy companies signed the letter, including Danish firm Ørsted, which pivoted from oil and gas to renewables in 2017, Finnish state-owned electricity utility Fortum Corporation, and Portugal-based utility EDP, the owner of Singaporean solar firm Sunseap. 

Mahindra Group, which operates in a country heavily dependent on fossil fuels, told Eco-Business in a statement that India has set a “bold” target to achieve 50 per cent energy from renewable sources by 2030, and its portfolio companies in the renewable space, including clean tech firm Mahindra Susten, “look to play a role in this mission.”

The US$19 billion-valued Mahindra Group has committed to cutting its Scope 1 and Scope 2 emissions – that is, the company’s direct and indirect emissions – to net zero by 2040 and use only renewable energy by 2030.

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