Every fraction of a degree counts: Time for governments and business to double down on climate action

Oct 10, 2024

Alliance of CEO Climate Leaders are making policy asks on climate action. Image: Getty Images/iStockphoto

Alliance of CEO Climate Leaders

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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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