3 Ways CEOs Can Tackle Climate Change And Build A Net-Zero Economy

World Economic Forum - Nicole Systrom

Some CEOs are optimistic about their ability to become net-zero, but less sure about how to achieve it. Image: Freepik

Author Nicole Systrom is founder of the Sutro Energy Group, which partners with philanthropists, investors and entrepreneurs to accelerate high-impact climate and clean technology solutions. Article Overview Urgency to mitigate climate change by 2030 requires public-private collaboration. Many CEOs are taking action but huge challenges remain to achieve ambitious climate targets. We outline three keys ways companies can use their influence and acumen to get to net-zero. Note The views expressed in this article are those of the author alone and not the World Economic Forum.

A growing number of CEOs get it: they have an obligation to address climate change.

Advocates and environmentalists everywhere are cheering commitments by big companies that demonstrate the various ways they are taking on climate change, from asset manager BlackRock’s push for portfolio companies to disclose net-zero plans to IBM’s commitment to hit net-zero greenhouse gas emissions by 2030.

As the US rejoins the Paris Climate Agreement and we approach the UN Climate Change Conference (COP26) in Glasgow this November, we’ll likely see a steady drumbeat of announcements in the months to come. But can companies really get there?

While many leaders I’ve spoken to are optimistic about their ability to use cleaner sources of energy, reduce buildings emissions and improve energy efficiency, making commitments is one thing; meeting them is quite another.

As one energy utility CEO told me, he thought 80% of getting to net-zero was achievable.

The hard part was the remaining 20%, because of everything from the intermittency of renewable technology to the high cost of energy storage to the challenge of upgrading our grid infrastructure, “The last mile” as this CEO called it.

So even though we’re just starting the race, it’s that last mile that we need to keep in mind. Here’s three key things companies can do to make it to the finish line:

1. Support early-stage entrepreneurs and scale solutions

Large corporations generally have the infrastructure, networks and the resources to scale technologies that startups don’t. But we can’t expect a successful company to abandon a corporate culture developed over decades to suddenly launch a quixotic quest for blue-sky innovation.

Fortunately, corporations are showing a greater interest in supporting climate entrepreneurship – and government is playing a part as well. The Department of Energy offers Lab-Embedded Entrepreneurship Programs, in which top scientists and engineers are assigned to US national laboratories where they perform early-stage research and development and train to be entrepreneurs.

Providing scientists with entrepreneurial acumen and skills gives them a better chance to succeed in the innovation ecosystem and seize commercial and investment opportunities. Using balance sheets or corporate philanthropy, the private sector can and should partner with government and the NGO community to support promising new developments.

And it’s not just about championing the little guy. Microsoft, for example, has committed to being carbon negative by 2030 and water positive with net-zero waste.

At the same time, its Climate Innovation Fund focuses on investing in developed climate solutions that require capital to scale in the market. The company prioritizes technologies that are relevant to its core business and help suppliers and customers reduce their carbon footprints.

  LARGE IMAGE

2. Lend climate innovators political capital

Big companies have no problem making their voice heard in policy debates – even those outside their areas of expertise or narrow self-interest, as we saw last spring when CEOs endorsed police reform during racial justice protests.

At the same time, early-stage entrepreneurs lack the capacity and expertise to engage with policymakers, which has led to a fundamental misunderstanding of how early-stage innovation works in many parts of government.

One way to bridge that gap would be for corporates to lend their lobbying expertise to climate innovators to ensure the trillions of dollars President Biden promises to invest, as part of his Build Back Better plan, are effective in incentivizing entrepreneurs and scientists.

At a mini, corporations should swear off lobbying against climate change regulation, which often undermines them.

What's the World Economic Forum doing about the transition to clean energy? Moving to clean energy is key to combating climate change, yet in the past five years, the energy transition has stagnated. Energy consumption and production contribute to two-thirds of global emissions, and 81% of the global energy system is still based on fossil fuels, the same percentage as 30 years ago. Plus, improvements in the energy intensity of the global economy (the amount of energy used per unit of economic activity) are slowing. In 2018 energy intensity improved by 1.2%, the slowest rate since 2010. Effective policies, private-sector action and public-private cooperation are needed to create a more inclusive, sustainable, affordable and secure global energy system. Benchmarking progress is essential to a successful transition. The World Economic Forum’s Energy Transition Index, which ranks 115 economies on how well they balance energy security and access with environmental sustainability and affordability, shows that the biggest challenge facing energy transition is the lack of readiness among the world’s largest emitters, including US, China, India and Russia. The 10 countries that score the highest in terms of readiness account for only 2.6% of global annual emissions. LARGE IMAGE To future-proof the global energy system, the Forum’s Shaping the Future of Energy and Materials Platform is working on initiatives including, Systemic Efficiency, Innovation and Clean Energy and the Global Battery Alliance to encourage and enable innovative energy investments, technologies and solutions. Additionally, the Mission Possible Platform (MPP) is working to assemble public and private partners to further the industry transition to set heavy industry and mobility sectors on the pathway towards net-zero emissions. MPP is an initiative created by the World Economic Forum and the Energy Tansitions Commission.

3. Make net-zero part of a business strategy

A goal of net-zero carbon emissions by 2050 is a laudable one. But achieving it will require a full-scale review of a company’s business strategy, including products, operations, vendors and supply chains. The good news is that while 60% of the 100 CEOs at large companies surveyed recently said they have already taken that important step, four in 10 of these companies haven’t. The more companies with a net-zero strategy, the clearer the demand for “last mile” innovation will be.

Regarding climate, Jesper Brodin, the CEO of Ingka Group, which owns IKEA, put it simply: “We have definitely shifted the dialogue from the ‘why’ and are now focused fully on the ‘how.’” We need more leaders who are ready to ask: how does my company reach net-zero? If current technology doesn't get us there, how can we support the research and startups that could?

Getting there won’t be easy. But after developing lifesaving vaccines faster than ever, there’s no reason we can’t apply the same urgency and commitment to problem-solving to addressing climate change. And we have to start now.



Links

• Corporate action on climate change needed more than ever
• How the institutional response to COVID-19 can prepare us for climate change
• 4 questions CEOs must answer this year to achieve net zero
• (AU) Corporate Watchdog Puts Climate Change Warnings Into Action
• AU) Corporate Climate Risk Disclosures Must Show More: IGCC
• If We’re Bailing Out Corporations, They Should Bail Out The Planet
• (AU) No More Room For Excuses On Climate
• What Kenneth Hayne Says About Climate Change - Transcript
• (AU) Hayne Rebukes Directors On Climate Risk Failure
• Business Lobby Groups Accused Of 'Undermining' Climate Change Policy
• ASIC Issues Updated Guidance For Directors Seeking To Avoid Climate Lawsuits
• Directors Are In The Crosshairs Of Corporate Climate Litigation

(AU The Guardian) Australia Has Wasted So Many Years When It Comes To Climate Change

The Guardian - Greg Jericho

The first mention in parliament of ‘greenhouse gas’ occurred in 1986 - decades later the government is still not proposing anything near appropriate

‘Over 35 years nothing has really changed – no urgency and no real policy.’ Photograph: Mick Tsikas/AAP

So many wasted years.

The first mention in parliament of “greenhouse gas” occurred in 1986 when the ALP’s Barry Jones took a question on whether the government was concerned about the greenhouse effect and reports that it “will raise ambient temperature to such an extent that sea levels will rise and flood coastal cities?”

Jones set the tone for climate-change policy ever since by suggesting calm and replying that he “must emphasise that the consequences, at least for the next 50 years … are not likely to be either catastrophic or even dramatic”.

He did however note that the issue did require “appropriate preventive long term action.”

Here we are 35 years later, not even close to a government proposing anything near appropriate.

Instead this week the prime minister effectively announced a coal industry subsidy program disguised very poorly as a climate change policy.

He also showed himself to be completely out of step with the leaders of other nations at US president Joe Biden’s Leadership Climate Summit by failing to commit to any further cuts and instead praising “Australian companies like Fortescue, led by Dr Andrew Forrest, Visy, BHP, Rio Tinto, AGL”.

He did however commit $275m for hydrogen hubs over five years and $263.7m for carbon capture and storage (CCS) projects and hubs over the next decade.

Ahh, CCS, that glorious amalgam of policy and boondoggle.

It too has a long history.

Clean coal production has from the beginning been governments’ go-to response to deal with climate change.

The first mention of “clean coal” in question time should have been warning enough for what would follow.

In 1990, the Hawke government’s minister for primary industries and energy, John Kerin, was asked about the impact of the “decision to adopt targets for the reduction of greenhouse gas emissions on the Australian coal industry?”

Kerin cited the Australian Coal Association, which he noted “places a very high priority on the reduction of greenhouse gases generated by coal production and combustion”. He then suggested that “it goes without saying, of course, that the coal industry has been working on this question for quite some time”.

Well, quite.

He concluded by noting that the industry “is already taking steps to reduce the level of emissions from that industry by promoting clean coal technology.”

Ahh bless.

Thirty-one years later and those steps are apparently still being taken.

Such a long walk for so little distance covered.

Clean coal and carbon capture and storage reached its peak policy popularity in the mid-late 2000s.


The first person to mention “carbon capture and storage” in the House of Representatives was Alexander Downer in 2005 when he suggested of a new “Asia-Pacific partnership on clean development and climate” that “we have identified many areas for potential technology cooperation, including clean coal, agriculture, carbon capture and storage”.

Perhaps back then one could be forgiven for thinking that that “potential technology” might save us, but now you would need to be wilfully ignorant to suggest such a thing.

CCS became supremely popular during the Rudd government years because while it retained its handy “pro-coal” bias, it was also a policy that – like others aspects such as nuclear power – only made the slightest bit of sense with a price on carbon.

As early as 2006, Lenore Taylor, then writing for the AFR, noted even the Australian Coal Association was saying “carbon capture will only happen when there is an emissions trading scheme so that electricity generators can recoup their investment.”

Oddly there was no mention of that this week by Scott Morrison.

Of course, it’s obvious the Morrison government doesn’t even believe its own spin.

When the government was confronted with the reality of the pandemic and massive job losses it committed $130bn in one year for the jobkeeper program.

If the government truly thought carbon capture and storage was the solution to allowing our mining sector to thrive while also combatting climate change, would they really only commit 0.2% of that amount?

$26m a year to develop a technology that has been promised and failed to deliver for over 30 years?

It’s a policy only a climate change denier would bother pretending is worthy; and even the pretence is pretty meagre.

And so this week we realise that over 35 years nothing has really changed – no urgency and no real policy. All that has differed is the addition of more wasted years.

Links

• The US climate target blows Australia’s out of the water - Frank Jotzo
• Australia has been talking up its climate credentials – but do the claims stack up?
• (AU) ‘Uniquely Unsuited’: Government Accused Of Stacking Climate Body With Fossil Interests
• (AU) Wake Up, Mr Morrison: Australia’s Slack Climate Effort Leaves Our Children 10 Times More Work To Do
• (AU) Councils Across NSW And Queensland Join Forces To Demand Climate Action From Morrison Government
• (AU) Joe Biden's Climate Envoy Admits US And Australia Not On 'Same Page'
• (AU) Energy Policy Paralysed As Nationals Firm Up Demands
• (AU) Procrasti-nation: How Australia’s Government Is Filibustering The Climate Emergency

(AU SMH) Australia Left Behind As Global Climate Action Gathers Pace

Sydney Morning Herald - Nick O'Malley

Scott Morrison’s climate address to world leaders began as most online exchanges do, with a technical glitch, an awkward pause and blank stares.

“Mr Prime Minister I’m not sure we are hearing you here,” said the United States Secretary of State Antony Blinken after half a minute or so of the PM’s animated silence.

On the Pacific island of Abaiang, people must use a boat to cross from one side of a village to another at high tide as the sea creeps further in. Credit: Justin McManus

To Professor Malte Meinshausen, director of the Climate & Energy College at the University of Melbourne, a researcher with years of climate policy experience in Australia and Germany under his belt, the moment was illustrative of the entire address.

In his view the speech was out of step with those of other leaders in tone and content.

As expected the announcements made before and during the summit left Australia further isolated on climate from its closest friends, with the Prime Minister declining to raise the nation’s emission reduction target of 26-28 per cent by 2030 based on 2005 levels.

National baselines vary, but Australia’s ambition is now around half that of the US and a third that of the UK. This is particularly significant as when Australia set that target it was in lockstep with the US. And crucially, Morrison emphasised that Australia disagreed with its peers on the significance of timing.

″For Australia, it is not a question of if or even by when for net zero, but importantly how,” he said.

For the rest of the world the “when” is vital. The urgency of the crisis means emission reductions must begin at once and increase rapidly.

A key purpose of the summit was to accelerate the pace of action and shift global attention from 2050 to 2030.


PM avoids putting timeframe on zero emissions target at virtual summit.

“This is the decade we must make decisions that will avoid the worst consequences of the climate crisis,“Biden  said in his address.

In Meinshausen’s view, this element of the Prime Minister’s speech amounted to a dismissal of global efforts and was a “diplomatic affront”.

Nonetheless, he views the summit as a resounding success.

The United States, he notes, demonstrated that after four years of diplomatic isolation on climate change it still has a staggering power to convene.

That the US was able to secure not only the presence of Chinese leader Xi Jinping – despite increasing tensions between the nations – and to have him reiterate China’s commitment to reaching net zero by 2060 was an achievement in its own right, Meinshausen says.

Policy director for the Investor Group on Climate Change Erwin Jackson agrees.

“I’ve never seen anything like it and I have been in this game for 30 years,” he said.

In his view the summit marked a turning point from how leaders and negotiators typically emphasised what actions they could not take rather than those they could.

Due to a combination of the overwhelming tide of evidence about the rapid pace of climate change, the emergence of new clean and cheap energy technologies and the new commitment of investors and businesses, as well as governments and civil society groups, he sees a “race to the top” emerging.

This is not to say actions undertaken or even committed to by the world are sufficient to meet the challenge, but that momentum is rapidly shifting, Meinshausen says.

Biden’s own climate envoy, John Kerry was blunt about this point too.

“Is it doable? Will we probably exceed it? I expect yes,” John Kerry said of the new US goal. “Is it enough? No. But it’s the best we can do today.”

Former Kiribati president Anote Tong, a veteran climate campaigner on behalf of his low-lying Pacific nation, welcomed the gathering momentum but he was disappointed by Australia’s apparent lack of conviction.

There are some people in the world, he told the Herald and the Age, who believe climate change will not have a direct impact on them, and are therefore unwilling to take significant action to ameliorate it.

He said he was glad Morrison had referred again to Australia’s “Pacific family”.

“I think the thing with family is that you take care of each other, you don’t do something you know is detrimental to the welfare of members of your family.”

Links

• As Australia tiptoes to 2050 climate targets, the world moves on 2030
• Morrison’s long walk to net zero
• World’s oceans changing as currents show new patterns
• The feds have ditched us on climate change, it’s time we ditch them too
• ‘There are no jobs on a dead planet’, Sharan Burrow tells Biden’s summit
• Australia left behind as global climate action gathers pace
• Scott Morrison is out of sync with the world on climate policy
• Shenhua coal deal points to mining policy on the run