Every fraction of a degree counts: Time for governments and business to double down on climate action
Alliance of CEO Climate Leaders are making policy asks on climate action. Image: Getty Images/iStockphoto
- More than 100 CEOs and Senior Executives from Alliance of CEO Climate Leaders share open letter to world leaders ahead of the UN Climate Change Conference 2024 (COP29).
- The Alliance of CEO Climate Leaders represents $4 trillion in revenues and 12 million employees. Between 2019 and 2022, alliance members slashed aggregate emissions by 10% while delivering aggregate revenue growth of 18% in the same period.
- Every fraction of a degree counts in the race to net zero: we need transformative policies and actions to stand a chance of winning it.
This letter is being released ahead of COP29 by the World Economic Forum on behalf of the Alliance of CEO Climate Leaders.
Governments and the private sector need to enhance collaboration to deliver on the Paris Agreement goals, closing the ~600 Gt emissions reduction ambition gap by 2050 to limit global warming to 1.5°C. The Alliance of CEO Climate Leaders – representing a combined $4 trillion in revenue, 12 million employees and 12 industries – is committed to accelerating corporate climate action at the pace and scale needed and has delivered collectively ~10% emissions reduction from 2019 to 2022, outperforming major economies.
We welcome COP28 pledges on renewable energy and energy efficiency and consensus on transitioning away from fossil fuels in a just, orderly and equitable manner while strengthening adaptation and the nexus with nature, food and health. To move from pledges to impact and accelerate action at scale, governments and businesses need to combine efforts and address obstacles, such as complex and inefficient policy, permitting and reporting frameworks.
Ahead of COP29, 117 CEOs, including 49 First Movers Coalition and 27 regional CEO climate group members, are making the following policy asks to regulators and policy-makers to improve the business case for climate action and spur investment:
1. Develop ambitious, credible and investable Nationally Determined Contributions (NDCs)
We call on governments to upgrade their NDCs and international collaboration to close the ambition gap: the Global Stocktake shows that NDCs only provide for ~5% emissions reductions by 2030, far short of the 43% needed. NDCs should offer clear transition plans that provide the transparency businesses need for investment, transforming them into national roadmaps for growth, competitiveness and the future green workforce by:
- Integrating multisectoral and multistakeholder input, including from the private sector.
- De-risking and attracting long-term private investment by providing long-term visibility with comprehensive abatement and adaptation targets, embedded in predictable domestic policy.
- Designing sector-specific transition pathways equipped with quantified investment targets, financing needs, energy supply, demand and performance targets, as well as public procurement objectives.
- Detailing the long-term technological and human capabilities required, so businesses can help close the gaps without leaving anyone behind.
- Unlocking climate and nature synergies that reinforce National Biodiversity Strategies and Action Plans to halt and reverse ecosystem degradation, including through natural climate solutions.
2. Scale up climate finance from billions to trillions and de-risk private capital flows
The developing world needs $5.8-5.9 trillion for climate finance, covering both mitigation and adaptation, by 2030. The New Collective Quantified Goal must be raised significantly to aid developing countries disproportionally affected by climate change. Efficiently mobilizing private capital at scale is critical but it needs the right de-risking mechanisms to:
- Expand the use of carbon pricing, as only <25% of global emissions are priced.
- Support high-integrity voluntary carbon markets consistent with the climate mitigation hierarchy and advance international carbon markets via Article 6 negotiations, coupled with high-integrity standards, scientific monitoring and validation, clear buy-side processes and recognition.
- Phase out fossil-fuel subsidies in a just, orderly and equitable manner, redirecting them into green and efficient investments.
- Reduce cost-of-capital in low- and -middle-income countries where investment risk premiums are disproportionately high, including by substantially increasing concessional and blended finance, catalysed by more fit-for-purpose multilateral development banks.
- Scale and standardize de-risking tools, such as adaptation-linked debt, which enhance collaborative finance and create a virtuous cycle of de-risking, to ensure stable capital remuneration.
3. Remove transition obstacles to deliver on COP28 pledges
Currently, the total capacity of renewables awaiting permits is five times higher than installed capacity. 80 million kilometers of additional green grid will be needed by 2040, even before accounting for new energy-intensive usages like artificial intelligence. To meet COP28 energy pledges and ensure that energy demand growth is not met by new carbon-emitting fossil fuel investments, businesses will need local authorities to facilitate:
- Increased renewable and clean energy supply by eliminating permitting burdens on eligible projects and building grid readiness, including storage capacity, without eliminating essential environmental and community safeguards.
- Higher renewable demand through increased electrification of heat, transport and industry, with policies to drive price parity; demand is key to reducing investment risks, supported by a risk definition that integrates climate externalities.
- Improved energy efficiency by setting intensity targets, providing regulatory guidelines and incentives (e.g. tax relief on efficiency investments), and supporting existing solutions and efficiency in current assets.
4. Support breakthrough technologies to reach commercial scale and complement cost-competitive solutions
An estimated 30% of key mitigation technologies still face significant cost disadvantages, particularly in such heavy-emitting sectors as materials, transport and agriculture. Scaling these technologies, including clean hydrogen, hydrogen derivatives and carbon removals, is crucial to achieving industrial decarbonization.
We need supportive policies, incentives, streamlined processes and green public procurement targets to spur the market, facilitate uptake and reduce green premiums while maintaining support for cost-effective technologies (e.g. biogases, biofuels) as well as circularity solutions.
Governments cannot act alone: we call on fellow business leaders to commit strategically and financially to net zero
We urge our peers to demonstrate leadership and accountability in decarbonizing their operations and value chains by setting science-based targets, disclosing progress and developing climate transition plans, consistent with evolving frameworks and standards.
Business leaders should strengthen cross-sector value chain collaboration by supporting their suppliers, including small and medium-sized enterprises, to decarbonize through technical assistance, capability building, knowledge sharing, and financial mechanisms such as incentives and investments in advanced climate technologies, to address the green premiums.
The climate crisis is just one of many challenges facing us – from biodiversity and poverty to food systems and global health. What unites these issues is the need for urgent collaborative action to ensure a just and equitable transition and avert systemic shocks. We stand ready to collaborate with governments and peers to build on COP28 momentum at COP29 and beyond. By working together and taking the actions outlined in this letter, we can drive more action on climate and avoid every fraction of a degree of warming.
Signatories:
1. Vincent Clerc, Chief Executive Officer, A.P. Moller-Maersk
2. Morten Wierod, President and Chief Executive Officer, ABB Ltd
3. Robert Swaak, Chief Executive Officer, ABN AMRO
4. Julie Sweet, Chair and Chief Executive Officer, Accenture
5. José Manuel Entrecanales, Chairman and Chief Executive Officer, Acciona
6. Kjetel Digre, Chief Executive Officer, Aker Solutions AS
7. Tom Erixon, President and Chief Executive Officer, Alfa Laval
8. Jerome Frost, Chair, Arup Group
9. Pascal Soriot, Chief Executive Officer, AstraZeneca
10. Caspar Herzberg, Chief Executive Officer, Aveva
11. Christophe De Vusser, Worldwide Managing Partner and Chief Executive Officer, Bain & Company
12. Daniel W. Fisher, Chairman and Chief Executive Officer, Ball Corporation
13. Ana Botin, Group Executive Chairman, Banco Santander
14. Bill Anderson, Chief Executive Officer, Bayer
15. Carlos Torres Vila, Chair, BBVA
16. Hakan Bulgurlu, Chief Executive Officer, Beko
17. Christoph Schweizer, Chief Executive Officer, Boston Consulting Group
18. Rich Lesser, Global Chair, Boston Consulting Group; Chief Advisor, Alliance of CEO Climate Leaders
19. Aiman Ezzat, Chief Executive Officer, Capgemini
20. Jacob Aarup-Andersen, Chief Executive Officer, Carlsberg Group
21. Fernando A. Gonzalez, Chief Executive Officer, Cemex
22. Zoran Bogdanovic, Chief Executive Officer, Coca-Cola HBC AG
23. Luciano Francisco Alves, Chief Executive Officer, Companhia Brasileira de Aluminio
24. Samer S. Khoury, Chairman, Consolidated Contractors Company (CCC)
25. Feike Sijbesma, Chairman, Royal Philips; Co-Chair, Alliance of CEO Climate Leaders
26. Joe Ucuzoglu, Global Chief Executive Officer, Deloitte
27. Hiroshi Igarashi, Representative Executive Officer, President and Global Chief Executive Officer, dentsu
28. Christian Sewing, Chief Executive Officer, Deutsche Bank AG
29. Tobias Meyer, Chief Executive Officer, DHL Group
30. Sultan Ahmed bin Sulayem, Group Chairman and Chief Executive Officer, DP World
31. Will Gardiner, Group Chief Executive Officer, Drax
32. Dimitri de Vreeze, Chief Executive Officer, dsm-firmenich
33. Christophe Beck, Chairman of the Board and Chief Executive Officer, Ecolab
34. Coen van Oostrom, Founder and Chief Executive Officer, EDGE
35. Miguel Stilwell d'Andrade, Chief Executive Officer, EDP
36. Flavio Cattaneo, Chief Executive Officer, Enel
37. Catherine MacGregor, Chief Executive Officer, ENGIE
38. Juan Guisasola, Chief Executive Officer, EGUI
39. Bernard Delvaux, Chief Executive Officer, Etex NV
40. Janet Truncale, Global Chair and Chief Executive Officer, EY
41. Revathi Advaithi, Chief Executive Officer, Flex
42. David John Haines, Group Chief Executive Officer, Flora Food Group
43. Andrew Forrest, Executive Chairman and Founder, Fortescue Metals Group
44. Stefan Klebert, Chief Executive Officer, GEA Group
45. Jörgen Rosengren, President and Chief Executive Officer, Gränges AB
46. Poul Due Jensen, Group Chief Executive Officer and President, Grundfos
47. Daniel Ervér, Chief Executive Officer, H&M Group
48. Dolf van den Brink, Chief Executive Officer and Chairman of the Executive Board, Heineken NV
49. Carsten Knobel, Chief Executive Officer, Henkel
50. Stanley M. Bergman, Chairman of the Board and Chief Executive Officer, Henry Schein
51. Antonio Neri, President and Chief Executive Officer, Hewlett Packard Enterprise
52. Arun Misra, Chief Executive Officer, Hindustan Zinc
53. Toshiaki Higashihara, Executive Chairman, Hitachi Ltd.
54. Andreas Waage Enger, Chief Executive Officer, Höegh Autoliners
55. Miljan Gutovic, Chief Executive Officer, Holcim
56. Enrique Lores, President and Chief Executive Officer, HP Inc.
57. Ignacio Sánchez Galán, Executive Chairman, Iberdrola
58. Óscar García Maceiras, Chief Executive Officer, Inditex
59. Aloke Lohia, Group Chief Executive Officer, Indorama Ventures
60. Salil Parekh, Chief Executive Officer and Managing Director, Infosys Limited
61. Steven van Rijswijk, Chief Executive Officer, ING
62. Jesper Brodin , Chief Executive Officer, Ingka Group (IKEA); Co-Chair, Alliance of CEO Climate Leaders
63. Christian Ulbrich, Chief Executive Officer and President, JLL
64. George Oliver, Chairman and Chief Executive Officer, Johnson Controls
65. Bob Willen, Managing Partner and Chairman, Kearney
66. Cenk Alper, Chief Executive Officer and Board Member, Sabancı Holding
67. Hak Cheol Shin, Chief Executive Officer, LG Chem
68. HSH Prince Max von und zu Liechtenstein, Chairman, LGT Group
69. Hanneke Faber, Chief Executive Officer, Logitech
70. Dr. Anish Shah, Group Chief Executive Officer and Managing Director, Mahindra Group
71. Ahmed Galal Ismail, Chief Executive Offiver, Majid Al Futtaim Holding
72. Jonas Prising, Chairman and Chief Executive Officer, ManpowerGroup
73. Bob Sternfels, Global Managing Partner, McKinsey & Company
74. Takeshi Hashimoto, President and Chief Executive Officer, Mitsui O.S.K. Lines, Ltd.
75. Francisco Reynés Massanet, Chairman and Chief Executive Officer, Naturgy
76. Laurent Freixe, Chief Executive Officer, Nestlé
77. Tom Palmer, President and Chief Executive Officer, Newmont Corporation
78. David Knibbe, Chief Executive Officer, NN Group
79. John Vergopoulos, Chief Executive Officer, Norge Mining PLC
80. Ester Baiget, President and Chief Executive Officer, Novonesis; Co-Chair, Alliance of CEO Climate Leaders
81. Mads Nipper, Chief Executive Officer, Ørsted
82. Nikesh Arora, Chief Executive Officer and Chairman, Palo Alto Networks
83. Peter Stensgaard Mørch, Chief Executive Officer, PensionDanmark
84. Ramon Laguarta, Chairman of the Board of Directors and Chief Executive Officer, PepsiCo
85. Mohamed Kande, Global Chairman, PwC
86. Sumant Sinha, Chairman and Chief Executive Officer, ReNew; Co-Chair, Alliance of CEO Climate Leaders
87. Blake Moret, Chairman and Chief Executive Officer, Rockwell Automation
88. Stefan Georg Schaible, Global Managing Partner, Roland Berger
89. Roy Jakobs, Chief Executive Officer, Royal Philips
90. Marc Benioff, Chair and Chief Executive Officer, Salesforce
91. Christian Klein, Chief Executive Officer, SAP SE
92. Christian Levin, President and Chief Executive Officer, Scania
93. Peter Herweck, Chief Executive Officer, Schneider Electric
94. Dr. Roland Busch, President and Chief Executive Officer, Siemens AG
95. Kenichiro Yoshida, Chairman and Chief Executive Officer, Sony Group Corporation
96. Martin Lindqvist, President and Chief Executive Officer, SSAB AB
97. Bill Winters, Group Chief Executive, Standard Chartered Bank
98. Takeshi Niinami, President and Chief Executive Officer, Suntory Holdings
99. Andreas Berger, Group Chief Executive Officer, Swiss Re
100. Dr. Ilham Kadri, Chief Executive Officer, Syensqo
101. Christophe Weber, Representative Director, President and Chief Executive Officer, Takeda Pharmaceutical Company
102. T V Narendran, Chief Executive Officer and Managing Director, Tata Steel
103. Jonathan Price, President and Chief Executive Officer, Teck Resources Limited
104. Sigve Brekke, President and Chief Executive Officer, Telenor Group
105. Roeland Baan, President and Chief Executive Officer, Topsoe
106. Dave Regnery, Chair and Chief Executive Officer, Trane Technologies
107. Bart Sap, Chief Executive Officer, Umicore
108. Hein Schumacher, Chief Executive Officer, Unilever
109. Anna Borg, President and Chief Executive Officer, Vattenfall
110. Lars Petersson, Chief Executive Officer, VELUX
111. Henrik Andersen, President and Chief Executive Officer, Vestas Wind Systems
112. Martin Lundstedt, President and Chief Executive Officer, Volvo AB
113. Jim Rowan, President and Chief Executive Officer, Volvo Cars
114. Lasse Kristoffersen, President and Chief Executive Officer, Wallenius Wilhelmsen Group
115. Srinivas Pallia, Chief Executive Officer and Managing Director, Wipro Limited
116. Svein Tore Holsether, Chief Executive Officer and President, Yara International
117. Mario Greco, Group Chief Executive Officer, Zurich Insurance Group
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Tom Crowfoot
November 12, 2024
