Ahead of the pivotal G20 and COP26 summits and following the UN’s ‘code red for humanity’ warning, over 600 businesses from across the globe are calling on G20 leaders to go all-in to at least halve emissions by 2030 - in line with limiting global temperature rise to 1.5ºC.
Smart Phases (Novacab) is part of a 600+ businesses’ coalition that operates across all G20 countries, representing over $2.5 trillion in revenue and employing over 8.5 million people have appealed to the G20 leaders for clear policies on ending support for coal, fossil fuel subsidies and building a global financial framework that will trigger the rapid transition to a low-carbon economy.
The open letter from the coalition companies spanning sectors from energy to transport and fashion to construction, but also from SMEs to big corporations, represents the biggest and most ambitious global call for climate leadership from business to date.
The G20 Summit comes at a pivotal moment. Following the IPCC’s alert of a “code red for humanity” and ahead of COP26, G20 Leaders have an opportunity to send a strong signal that they are committed to addressing climate change. The G7 this year adopted clear language about the importance of working together to keep the 1.5ºC objective within reach. Expectations are now on the G20 as a whole to signal their commitment ahead of COP26.
As President of the G20 in 2021, Italy identified the three themes of “People, Planet and Prosperity” to structure its work, and has placed an ambitious Green Agenda at the core of the Italian G20 Presidency.
Progress has been made through G20 Ministerial meetings that have taken place so far. Of particular note in relation to the recommendations in the letter, "communiques" from G20 Finance and Central Bank Governors and the July Climate and Energy Ministerial make reference to 1.5ºC, strengthening NDCs and net-zero strategies ahead of COP26, the US$100 billion climate finance commitment and promoting the implementation of disclosure requirements (building on TCFD framework).
As we emerge from 18 months of uncertainty during the COVID19 pandemic, business needs clarity across the G20 - redirecting government spending towards achieving the halving of emissions by 2030 to keep the 1.5ºC climate goal within reach. This comes on the back of growing public and investor sentiment calling for climate action.
Companies that have emissions reductions targets themselves are more likely to choose to scale up operations in countries in which the policies in place enable them to carry out these reductions most efficiently. And that is including Small and Medium Enterprises as well as bigger corporations. While it might be more difficult for a company with operations across G20 countries to plan and implement its own targets when the national policies on climate and energy are not aligned, it is also difficult for SMEs operating 1 or 2 countries that have put in places weak measures to tackle climate change. A harmonized policy environment across the G20, where public spending and policies are in line with 1.5ºC, is beneficial for companies and the communities they serve.
The companies in the coalition recognize that ending coal and investing in the industries of the future is better for people, economies and climate and will set the course for mass electrification of transport and renewable power. But this is for a reason, or, I should say, many reasons. Indeed, since coal and fossil fuels have no viable future, it’s time for governments to make better financial decisions, focusing their spending on scaling up low-carbon technologies like renewables and electric vehicles and innovating the climate solutions that don’t yet exist. But also, Analysis, commissioned by the We Mean Business Coalition and conducted by Cambridge Econometrics, shows that green recovery plans including investment in renewable energy and EVs boost income, employment and GDP better than return-to-normal stimulus measures, with the added benefit of reducing emissions.
But also, we push for new technologies to be put forward. On top of that, the adoption of renewable power with a mix of energy storage capacities and electric vehicles (EVs) with proper infrastructure to date is already starting to surge up the ‘S-curve’ of growth, but the right policies are needed to harness this growth potential and drive the pace and scale of change necessary. The share of renewables in global electricity generation is expected to reach 30% in 2021, an all-time high, according to the IEA.
The momentum in politics and markets is strong. By taking a leadership position, the G20 can ensure the most efficient and cost-effective transition away from coal by immediately ending the financing of coal and setting clear timelines for the full phase-out of coal-fired power generation.
Specifically, the business coalition is asking for G20 countries to:
1. Strengthen national climate plans (Nationally Determined Contributions) in line with at least halving global emissions by 2030 and committing to achieve net-zero emissions no later than 2050. Governments need to publish long-term strategies, detailing pathways to 2030 and 2050 as soon as possible.
2. Commit to ending new coal power development and financing immediately and develop plans to phase out coal-fired power generation by 2030 for advanced economies, and 2040 for other countries, while promoting electrification of transport and uptake of renewable energy across sectors. This should include removing barriers to corporate purchasing of 100% renewable electricity to enable companies to go quicker in their clean energy transition and invest more than policy currently allows in many jurisdictions.
3. Align public finance, COVID-19 recovery spending and fiscal policies with a 1.5°C trajectory, while ensuring adequate support for adaptation and resilience measures.
4. Business needs clear policy direction and climate-aligned financial frameworks to trigger investments which will help all nations build back better after COVID uncertainty and get on track for halving emissions by 2030. Notably,
a. We must reconfigure the global financial framework by removing fossil fuel subsidies by 2025, and putting a meaningful price on carbon that reflects the full costs of climate change as part of a broader mix of policy instruments to support clean technology investments and innovation.
b. Climate-related financial disclosure needs to be made mandatory. Making risks, opportunities and impacts mandatory for corporations will increase transparency and support better-informed pricing and capital allocation to encourage investment flows towards more sustainable activities. This will build on the G7 leaders announcing that they back mandatory reporting back in June.
So, whether, you’re from an SME or a bigger organization, it’s time to consider joining such an effort. It’s good for the planet, for the economy and for the people. It’s time to change course and row in the proper direction; it's our (only) boat.