The Climate of Business #71: Did WEF 2023 change the discourse on corporate climate action?

Climate Change Reality

California's flooding reveals we're still building cities for the climate of the past (NPR)

‘Mature’ forests storing carbon can actually be pretty young, study says (Politico)

Zambia received 'debt-for-nature' proposal from WWF for restructuring (Reuters)

Researchers study how to help forests thrive in a warmer climate (Yale Climate Connections)

The right words are crucial to solving climate change (Scientific American)

How each country’s emissions and climate pledges compare (Financial Times)

Environmental justice targets needed to cut global inequality (The Guardian)

Climate change threatens everyone’s health, here’s how technology can help (WEF)

A kid's guide to climate change (NPR)

Why methane capture is so difficult (Politico)

Business Climate Reality

Banks still investing heavily in fossil fuels despite net zero pledges (The Guardian)

Global carbon dioxide removal totals 2 billion tonnes per year (Reuters)

World’s greenest company comes from one of the ‘dirtiest sectors’ in surprise ranking (Euronews)

An energy crisis is seeping into South Africa’s Food Supply (Bloomberg)

UN head accuses fossil fuel firms of business models ‘inconsistent with human survival’ (The Guardian)

Building sustainability programs from the ground up (GreenBiz)

Jeffries says investors may be underestimating new ESG risk (Bloomberg)

Could air someday power your flight? Airlines are betting on it (The New York Times)

The circular economy: A €4.1 trillion opportunity? (Euronews)

Danone lawsuit could be test case for new war on plastics (Financial Times)

More than 90% of rainforest carbon offsets by biggest provider are worthless (The Guardian)

Reality Check

Annually the World Economic Forum (WEF) surveys executives and decision makers across the board on the global risks ahead of the economy for the upcoming years. This year the survey certainly didn't shock executives, but certainly delivered unexpected results to the rest of the business community with results dominated by environmental risks for the coming years but also decade. ?

You might wonder why would the rest of the business community be shocked by the survey outcome. Simply put - because there is a discrepancy between concern and action (read more here). While environmental issues, such as natural resources crises, failure of climate adaptation and large-scale disaster, might be top of mind for decision makers - the distribution of resources doesn't prove this. This sentiment was also to be observed at WEF 2023 this year where the annual meeting took place, in last-minute-snowy Davos.?

This year's WEF meeting allowed for reflections around the war, the economic instability, and climate change. All these topics were finally intertwined in one discussion, which certainly wasn't the case last year.?

What were the key discussions around corporate climate action??

Need to speed up corporate climate action

Businesses were warned by António Guterres about the dangers of ineffective corporate efforts to achieve net zero and called for faster action. With determination he confirmed the progress made by businesses last year is ignorable against the increased investments in fossil fuels and lack of focus on actual decarbonisation against planning for it. Well understood by those of us who work in the sustainability sphere, reasons were outlined - consumer preference shifts and stricter policies around decarbonisation and reporting (more on the current and upcoming policies here).

André Hoffmann, vice chairman of Swiss drugmaker Roche: "Suddenly people have realised that it is something that's not just a way of presenting things, but that it is a necessity for survival."

The energy crisis, the green transition and the fossil fuel industry - co-existing impossible?

A key concern of many was the continued investment in the fossil fuel industry, which was securing financing for projects which will effectively eliminate any possibility of many economies around the world to achieve their commitments against the Paris agreements. Key executives pointed out that fossil fuel investments today will take years to become operational, which will certainly lead the world into a 3-4°C degree scenario, leading to close to a billion climate refugees by 2100. Further, many business voices confirmed we have moved away from a discussion about an energy transition, but rather one about energy and geopolitical security.

During the days of WEF 2023, UAE announced a key executive from the oil industry will chair COP28, which further intensified concerns around a global alignment on phasing out oil. Al Gore took stage to give a passionate speech on why elites are failing to take responsibility at scale for the crisis today and ahead.?

Christine Lagarde, Head of the European Central Bank said “We have to move towards digital and green transition,” and that it should be a priority to finance the future and take the first step in getting serious investment?

The global energy transition will be the next evolution in globalisation as it will create a new set of interdependencies and connections.

European Green Deal and EU Green Industrial Plan

The grand plan of the EU to transition to a green future has been praised by many. Europe’s Green Deal was approved in 2022 and represents a new legislative framework for clean technology, policies, as well as funding for member states and relevant partners, aiming to facilitate the process for the European Union to become climate neutral by 2050. At WEF Ursula von der Leyen announced the next phase of this plan - the EU Green Deal Industrial Plan. The plan certainly resembled elements of the Inflation Reduction Act, which aims to make the US a green powerhouse.?

The EU Green Deal Industrial Plan aims to make Europe the home of clean tech and industrial innovation and will focus on:?

• speeding up regulatory approval for clean tech industrial projects in homegrown companies?
• offer more state aid reform with simpler and accelerated approvals”, for example through simple tax-break models
• EU funding to avoid a fragmenting effect on the single market and to support the clean-tech transition across the whole union. Some countries are likely to disproportionately benefit from such aid

Climate change & Health?

The topic of health and climate also dominated the discussion floors. The World Health Organisation (WHO) named the climate crisis the “biggest health threat facing humanity”. Many issues created or accelerated by climate change can be taken as examples for their large scale negative repercussions. A few examples were highlighted during WEF.

Air Pollution

Air pollution, the silent killer, is already responsible for seven million deaths a year, but WHO estimates an extra quarter of a million deaths each year between 2030 and 2050 will result from malnutrition, malaria, diarrhoea and heat stress.

Malnutrition??

Over 2.3 billion people in 2022 were confirmed as food insecure around the world. As climate change unfolds further, infertile lands leading to failed crop systems and food insecurity will dominate geopolitical discussions, as well as will affect supply chains, pushing prices across the whole economy up. Food is at the core of societal stability and lack of access to it will decrease productivity and economic output on the whole.?

International cooperation?

A recurring element of the annual WEF gathering is announcements around international industry-wide or cross-company initiatives to launch. A few this year were of course focussed on climate action:?

Giving to Amplify Earth Action (GAEA) Initiative?

The initiative, supported by 45 partners from philanthropic, public and private sectors, aims to help with the $3 trillion needed each year from public and private sources to tackle climate change and nature loss.?Read more here.

Coalition of Trade Ministers on Climate

The trade ministers of Ecuador, from within the member states of the European Union, Kenya and New Zealand, and many more joined forces to provide high-level political direction and guidance to foment inclusive international cooperation at the nexus of climate, trade and sustainable development.?

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