Climate action is reshaping the global economy.
More and more of the world’s leading companies are embracing the opportunity to drive innovation, increase competitiveness, enhance risk management and stimulate growth.
A growing number of governments are taking bold and ambitious policy decisions, committing to radically reduce emissions, while maximizing economic growth, creating jobs and protecting the health of citizens.
Clear policies embolden businesses to go further and faster, which gives governments the confidence to be yet more ambitious. Ultimately, these positive ‘ambition-loops’ are transforming entire systems, such as power, transport, the built environment, land and heavy industry – rapidly changing them from their emission-intensive origins to a zero-carbon future.
There is growing urgency for both businesses and governments to act on climate change. The IPCC special report on the impacts of global warming underlines the urgent need to limit global warming to no more than 1.5°C, to protect human health and economic growth. The report calculates that a 1.5°C warming trajectory requires the global economy to cut carbon emissions by around 45% between 2010 and 2030, and deliver the net-zero emissions economy by 2050.
Achieving the 1.5°C goal will mean a rapid and radical transformation of the global economy as current emissions levels are on track to take us well beyond that level. Meanwhile, there is growing concern about the role of ‘tipping points’ accelerating the rate of climate change and its impacts, potentially triggering greater, unknown risks for economies and communities.
The good news is that embracing the zero-carbon transition can unlock new economic opportunities and jobs growth. A report from the New Climate Economy shows that shifting to a low-carbon economy could create a US$26 trillion growth opportunity and 65 million new jobs by 2030.
The momentum driving this transition is significant, and we can see clear signals of leadership and change in both global and local economies showing what is possible – which we can track through the lenses of Business, Policy, Technology, Culture and Investment.
You can delve into the key economic systems to see how they are being transformed to ultimately create the zero-carbon economy of the future. Navigate to the sections on Transport, Power and Built Environment to read more; the systems of Land Use and Heavy Industry will be available soon.
Or simply click Take Action to see how business leaders and policy makers can help to accelerate the zero-carbon transition.TAKE ACTION
Companies are taking bold climate action
+1,350 companies around the world, representing more that $24.8 trillion in market cap – equivalent to one quarter of global GDP – have committed to bold climate action through the We Mean Business coalition’s partner initiatives.
Committed to the Paris Agreement
+1,000 companies are committed to set science-based emission reduction targets that are in line with the goals of the Paris Agreement. These include companies from all sectors, headquartered in +50 countries around the world.
Raising ambition to limit global warming to 1.5°C
In response to the latest science, +290 companies are demonstrating leadership by pledging to set 1.5°C aligned science-based targets and reaching net-zero emissions by 2050. Join the Campaign here >
Companies are collaborating to reach net-zero
No company can reach net-zero emissions alone—nor can we build a net-zero economy working in isolation. We need radical collaboration. Companies are putting this into action and working with each other, their employees, suppliers, investors and more to accelerate action.
Delivering on bold climate commitments
Companies are delivering on their commitments. Over 250 of the world’s most influential companies are switching to 100% renewable electricity, with the RE100 initiative led by The Climate Group, in partnership with CDP. Meanwhile +95 are committed to smart energy use with EP100 and +85 switching their fleets to electric vehicles with EV100, also led by The Climate Group.
Maersk shows leadership for shipping industry
Maersk – the world’s largest shipping container company – laid down the gauntlet for the industry and its suppliers by setting course for carbon neutrality by 2050. They have already cut relative CO2 emissions by 46% versus a 2007 baseline. Find out more >
IKEA progresses towards climate neutrality by 2030
INGKA Group (formerly IKEA) – the world’s largest home furnishing company – is accelerating towards its goal of achieving a climate positive value chain by 2030 while growing the IKEA business, including switching to 100% renewable electricity by 2020 and 100% zero-emission home deliveries by 2025. Find out more >
Levi Strauss & Co. raises climate ambition
Levi Strauss & Co. has already achieved its initial science-based emission reduction target of 25% reduction ahead of the planned 2020 goal. The company has now built on this success and committed to a 90% reduction in GHG emissions from within their own facilities and a 40% reduction in its global supply chain by 2025, as well as switching to 100% renewable electricity. Find out more >
Rolls-Royce is harnessing engineering experience
Rolls-Royce is applying its world-class engineering capabilities and years of experience in hybrid and electrical power to be part of the solution to society’s greatest technological challenge. The company is pioneering the electrification of flight, while building on its innovations in rail, marine and power. Find out more >
+20 countries committed to net-zero by 2050
Over 20 countries have either committed to net-zero emissions by 2050 or already achieved it, including the UK, Norway, New Zealand, Costa Rica, Sweden and France. In fact, almost one-sixth (16%) of global GDP is now covered by net-zero emissions targets set by nations, regions and cities.
EUbacks green recovery
In the wake of the COVID-19 pandemic, the EU approved the most ambitious climate change plan to date, agreeing to pour more than $572 billion into green measures including EVs and renewable energy.
Countries look to recover better with climate action
A host of countries including China, India and South Korea have introduced various climate-friendly measures as part of their overall stimulus spending in response to the economic downturn caused by COVID-19.
States and cities commit to action
Three US states have committed to net-zero emissions by 2050 or earlier – California, the world’s fifth largest economy, Hawaii and New York. Louisiana Governor John Bel Edwards has set a pathway for the state to transition to net-zero carbon emissions by 2050. And over 90 major cities representing more than 700 million citizens, under the umbrella of C40, have committed to help deliver the goals of the Paris Agreement including: Buenos Aires, Cape Town and London.
Photovoltaic leads the clean tech revolution
The price for developing and deploying solar technology has plummeted in the last 30 years, making it both more effective, more affordable and more efficient.
Better, faster, cheaper
Not just solar, but many of the key technologies that enable the transition to zero-carbon are getting better, faster and cheaper: wind turbines, electric vehicles, hydrogen fuel cells and battery storage.
Carbon capture shows promise
Clean-tech is also advancing in new ways and new directions: a growing number of pilot carbon capture projects are helping to prove the technology’s viability and reduce costs. For example, a Tata Chemicals Europe scheme in Cheshire will capture 40,000 t of carbon dioxide a year from 2021.
Trees are effective carbon sinks
Ironically, amongst breakthrough developments, high-tech sophistication and advancement, perhaps one of the most advanced and sophisticated technology for reversing the effects of climate change is actually a billion years old. Trees.
Public backing for climate action
Public support for climate action has shown signs of increasing in many countries in the wake of the COVID-19 pandemic, with one UK-based report showing broad support for a green economic recovery.
Our house is on fire
Before the COVID-10 lockdowns took hold, millions of school children around the world made their voices heard by taking to the streets, while cities were being brought to a standstill by sit-down protests. Citizens are sending a powerful message to politicians and business leaders that they demand a faster, more effective response to the climate crisis. Many of these protest movements have continued online during the lockdown periods.
More climate action, faster
Things aren’t happening fast enough, but there are reasons for optimism. A lot is being done. Momentum towards a zero-carbon transition has reached critical mass. Now we need more action, faster.
Climate impacts purchasing behavior
There are other cultural signals of change that are affecting the economy, and influencing purchasing habits of billions of consumers. In the US, the percentage of Americans who say global warming is personally important and changing their purchasing behaviors is now at a record high of 73%.
Pollution is affecting lifespan globally
Citizens elsewhere are demanding action on air and water pollution. In China, toxic air is shortening the average lifespan by more than three years, while in India, air pollution can cut a person’s lifespan by four years on average.
Embracing a plant-based lifestyle
Then there are lifestyle changes – more people are embracing a plant-based lifestyle – the so-called Climate Diet. There has been a 600% increase in people identifying as vegans in the US in the last three years.
The climate revolution will be televised
Popular culture is also a powerful voice in demanding a faster transition to zero-carbon. Sir David Attenborough’s Blue Planet on BBC Worldwide, and Our Planet on Netflix have created another watershed moment, giving a global TV audience an insight into pollution and climate change, and taken public awareness up by a quantum leap.
Employers are expected to take a stand
At work, 75% of millennials now expect employers to take a stand on key issues including climate change, according to Glassdoor. And there is an unprecedented expectation on brands to demonstrate environmental responsibility or lose customers and brand loyalty.
Investors are backing climate action
The Net-Zero Asset Owner Alliance now represents nearly $5 trillion in assets under management, across an international group of 29 institutional investors, showing united investor action to align portfolios with a 1.5°C scenario.
Climate Action 100+
More than 500 investors with over $47 trillion in assets under management have signed on to Climate Action 100+, calling for the 100 ‘systemically important emitters’ – the top 100 companies accounting for two-thirds of annual global industrial emissions – to tackle climate change.
BlackRock backs climate action
In his highly influential Letter to CEOs, Larry Fink outlined a major shift in BlackRock’s 2020 investment strategy from being a key funder of coal, oil and gas projects to making sustainability its “new standard for investing”. The world’s largest asset manager is offloading $500 million in shares of thermal coal related companies as a start. Meanwhile, BlackRock has placed 244 companies “on watch” for insufficient progress on climate issues.
The divestment movement grows
Investors, pension funds and insurance companies are waking up to the role they play in financing polluting activities. In Europe, a group of global pension funds and investment managers, with over $40 trillion in assets, have drawn up a plan to cut carbon in their portfolios to net-zero by 2050.
ESGinvesting shows resilience
The shift to Environmental, Social and Governance (ESG) investing has not been dented by the COVID-19 pandemic. ESG leaders within the S&P 500 saw roughly half the losses compared to the overall index in the immediate aftermath of the outbreak, underlining the corporate benefits of climate action and resilience.
Task Force on Climate-related Financial Disclosures
Perhaps the biggest lever for change is understanding the ‘downside’ – what it might cost if we don’t transition. Which is why the FSB’s Task Force on Climate-related Financial Disclosures (TCFD) has developed voluntary, consistent climate-related financial risk disclosures for use by companies to provide information to investors, lenders, insurers, and other stakeholders about the risks. More than 790 organizations have expressed their support for the recommendations of the TCFD.
Inevitable Policy Response
As the realities of climate change become increasingly apparent, a robust policy response is inevitable. The questions for risk forecasting is when this response will come, what policies will be used, and where the impact will be felt. The Inevitable Policy Response project forecasts a response by 2025 that will be forceful, abrupt, and disorderly because of the delay.
Challenges to overcome
There are some major challenges ahead as we transition to a zero-carbon economy. It will not all be plain sailing. Significant problems have yet to be tackled – we are not under any illusions – the transition to a fully net-zero economy will not be easy.
COVID-19 presents unprecedented challenges
The COVID-19 pandemic has created unprecedented health and economic challenges for all economies, but particularly for those still in a development phase. However, growing evidence suggests that green stimulus measures are the most effective way to boost economic growth, while creating jobs and helping to tackle climate change.
Jobs in transition
Shifting to a low-carbon economy could create a US$26 trillion growth opportunity and 65 million new jobs by 2030, equivalent to today’s entire workforce of the UK and Egypt combined, according to New Climate Economy research.
Unprecedented pace of change
It is technically and financially possible to halve carbon emissions by 2040 – reducing annual emissions to 20 Gt, with further cuts thereafter to achieve the Paris climate objective – while simultaneously growing energy supply to support economic growth and social inclusion, according to the ETC.
Investing in the Future
The absolute scale of the investment required for energy transitions over 2015-2030 – an additional $300-600 billion annually – does not create a major macroeconomic challenge, but it implies a major shift in investment flows from fossil fuels to low-carbon technologies and energy efficient equipment and infrastructure, according to the ETC.
Ensuring a just, fair and inclusive transition
As companies and governments accelerate the transition to zero-carbon economies and build resilience to climate impacts, their actions could impact people, workers and communities unequally, both positively and negatively. Forward-looking businesses and policy makers are taking the necessary steps to ensure that the transition is achieved in a way that is just, fair and inclusive. These examples can help demonstrate how the transition can be successful without leaving anyone behind.
Investors call for just labor practices
Investors increasingly look for disclosure of labor practices and workforce planning, seeing it as material to the company’s performance as well as part of responsible investment. Examples include ShareAction’s Workforce Disclosure Initiative, backed by $10 trillion in investor capital, and CalPERS’ Responsible Contractor Program.
Solidarity and Just Transition Silesia Declaration
Studies indicate that climate policies can result in net employment gains of 0.5-2%, or 15-60 million jobs globally, with the ILO estimating a net increase of 18 million jobs. Representatives of 45 countries taking part in the COP24 UN global climate summit in Katowice, Poland adopted by acclamation the Solidarity and Just Transition Silesia Declaration.
Change is happening faster than many expect.
We are witnessing a revolution happening right now, with signals of changes all around us. The scale of this transition is often surprising if you don’t see the whole picture.
The benefits will be immense – not only will the transition help address climate change, it will create jobs and sustainable growth, enhance the competitiveness of industry and protect the health of citizens. It will also create greater resilience in the economy, energy security and dramatically improve people’s quality of life – through better air quality, quieter cities and cleaner energy.
This is the kind of future we want. For ourselves and for future generations.
But even with all these clear signals of change and the momentum achieved, it’s not happening fast enough. Government and business can be more ambitious and speed up the delivery of climate action. To get to the net-zero carbon economy, the adoption of key solutions needs to accelerate to ensure progress happens faster across the entire system.
We are creating a better future – and it’s our goal to make it happen faster.
What can you be doing to accelerate that change?
Join other leading businesses, step up and commit to bold climate action.
- Set an ambitious science-based emission reduction target that’s aligned with what science says is necessary to limit global warming to 1.5°C.
- Commit to net-zero emissions by no later than 2050.
- Consistently and vocally back ambitious climate policy through direct interactions with governments, and ensure that trade groups are in line with your position.
Drive change at the pace and scale required to achieve net-zero carbon emissions globally by 2050.
- Commit to achieving a just transition to economy-wide net-zero emissions by 2050 at the latest.
- Strengthen nationally determined contributions and 2030 targets in line with a 1.5ºC trajectory.
- Lay out national policies, plans and laws to enable the achievement of these targets.