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The urgency of tackling the climate crisis has compelled the
CEOs of many of the world's top companies and investors to urge G7
and other world leaders to take "robust" steps to reduce GHGs that
will enable clean energy technologies to compete and succeed in the
global marketplace.
In an open letter dated 9 June to G7
leaders, the heads of 79 global corporations, including the likes
of Amazon, Iberdrola, Ikea, Enel, Nestle, Mahindra Group, and
Vestas, said G7 leaders need to introduce "transformative policy
change" that will drive more companies to aim for credible net-zero
carbon operations by 2050.
To drive those corporate actions, the CEOs said governments need
to engage in robust steps, such as pricing carbon on a rising
scale, eliminating fossil fuel subsidies, and cutting tariffs on
climate-friendly goods so that low-carbon technologies can compete
on a level playing field. They also called on political leaders to
control "leakage" of carbon credits through international
cooperation on a globally connected carbon market as well.
"We now need these commitments to turn into actions, especially
in the short term. This is because action from governments can
accelerate even more action from companies," the CEOs declared.
The letter by the CEOs was released ahead of the G7 summit
starting 11 June and on the same day as investors representing $41
trillion in assets warned governments around the world to raise
their climate ambitions or risk losing investment opportunities for
tackling the climate crisis. The 457 investors also called for not
just improving currently voluntary standards for disclosing climate
risk, but for mandating it.
"While we recognize the differentiated responsibilities and
respective capabilities of countries, we believe that those who set
ambitious targets in line with achieving net-zero emissions, and
implement consistent national climate policies in the
short-to-medium term, will become increasingly attractive
investment destinations. Countries that fail to do so will find
themselves at a competitive disadvantage," the 2021 Global Investor Statement
to Governments on the Climate Crisis read.
According to a report released by the
International Energy Agency (IEA) on 2 June, global investment in
energy is set to rebound by nearly 10% in 2021 to $1.9 trillion,
reversing most of last year's drop caused by the COVID-19 pandemic.
But the IEA said spending on clean energy transitions needs to
accelerate much more rapidly to meet climate goals.
The same report said the anticipated $750 billion investment in
clean energy technologies and efficiency in 2021, though
encouraging, "remains far below what's required to put the energy
system on a sustainable path."
Ahead of the G7 meeting, the finance ministers and central bank
governors of the countries met and agreed on the need for a
financial system that recognizes the material financial risk that
the climate crisis poses to investments across the board, be they
real estate, transportation, energy and water utilities, or public
health.
In a joint communique issued 5 June,
they also supported a move towards mandatory climate-related
financial disclosures that provide consistent and decision-useful
information for market participants and that are based on the Task
Force on Climate-related Financial Disclosures (TCFD) framework, in
line with domestic regulatory frameworks.
"Investors need high quality, comparable, and reliable
information on climate risks. We therefore agree on the need for a
baseline global reporting standard for sustainability, which
jurisdictions can further supplement," the communique said.
In the US, the Securities and Exchange Commission (SEC) is soliciting public comment on
the best way to improve climate risk disclosures. The SEC deemed
climate impacts to be a material risk a decade earlier, but has
started to scrutinize the reports, given the complaints it has
received over inconsistent disclosures.
Posted 10 June 2021 by Amena Saiyid, Senior Climate and Energy Research Analyst
