Klaus Schwab, Founder and Executive Chairman of the World Economic Forum, has written a letter to all Forum Members and Partners asking them to tackle the urgent issue of climate change by committing to net-zero carbon emissions by 2050 or earlier.
The move comes days ahead of the start of the World Economic Forum Annual Meeting 2020, which convenes under the theme, Stakeholders for a Cohesive and Sustainable World. In the letter, Schwab writes: “The opportunity and the need for companies and investors to show leadership on climate change is more eminent than ever before.” He added that making a commitment to tackle the urgent issue of climate change is also in line with the stakeholder imperative of the 2020 Davos Manifesto, a document released by the Forum in December outlining the concept of stakeholder capitalism in the modern era.
The year 2020 marks the fifth anniversary of the Paris Agreement on climate change. However, the years since have been marked by under-performance at the government and business level in implementing decarbonization policies. Schwab’s request will form a key element to discussions across each industry and community group at the Annual Meeting, with the hope of lending momentum to ongoing efforts by government, business and finance leaders at the beginning of this critical decade.
A number of initiatives are expected to be either launched or advanced next week:
- ESG Reporting: A common challenge for businesses looking to take action on climate is the lack of a globally accepted standard of measurement. The 140-member International Business Community will meet this week to review and hopefully adopt proposals that could move climate action further into the mainstream.
- Net-Zero Asset Owners Alliance: A coalition of institutional investors with nearly $4 trillion under management has committed to transitioning their portfolios to net-zero emissions by 2050. Members of the alliance include some of the world’s largest insurers and pension funds. The alliance is expected to offer an update on activities in a press conference during the Annual Meeting.
- Mission Possible Platform: A public-private partnership aimed at helping industries that rely heavily on fossil fuels – such as aviation, maritime, trucking, chemicals and iron and steel – transition to a net-zero future. Chief executive officers in these industries will meet in Davos to discuss the technology, financing and policy interventions needed for a low-carbon transition.
- 1t.org: While the battle against climate change can only be won through systemic change across the financial, industrial and energy sectors, vital support in the effort to reduce greenhouse gas levels in the atmosphere can be gained through adopting nature-based solutions. In support of this, a new platform, 1t.org, will be launched to coordinate and scale up efforts to either plant or restore 1 trillion trees by the end of the decade.
According to Net Zero Challenge, a report published by the World Economic Forum this month, 7,000 companies worldwide now voluntarily disclose climate-related data. However, of these, only a small majority have adopted science-based targets aimed at tackling climate change. The report also notes that among governments, while 121 have declared an ambition to become net-zero by 2050, only seven so far have developed the policy framework to make it happen.
While progress to date has undeniably been insufficient, the report also found that a number of CEOs now view climate action as an opportunity. News from the private sector so far in 2020 would appear to back this up, with a number of announcements made in the past week including:
- Blackrock, the world’s largest asset manager, announced a new strategy to put climate at the centre of its investment strategy with plans to, among other things, exit investments with a high sustainability-related risk
- Microsoft unveiled an ambition to reach net-zero emissions by 2030 and to have offset all the emissions it has made in its entire history by 2050
- Nestlé announced it will invest over $2 billion in a move towards food-grade sustainable packaging
“It is still far too early to be talking about tipping points, but 2020 has brought with it a discernible shift in momentum as businesses realize that long-term continuity depends on them taking decisive, collective action on climate. The priority for the Annual Meeting is transforming this energy into a movement, not just of early adopters but the entire business community,” said Dominic Waughray, Managing Director, World Economic Forum.
The World Economic Forum Annual Meeting 2020 will take place 21-24 January in Davos-Klosters, Switzerland.