A growing number of businesses have recognised the economic benefits of the transition to a carbon neutral economy. It is now critically important that Europe commits to strengthening the Green Deal with a 55% greenhouse gas reduction target for 2030, write Eliot Whittington and María Mendiluce.
Eliot Whittington is Director of The Prince of Wales’s Corporate Leaders Group. María Mendiluce is CEO of the We Mean Business coalition.
Europe has been deeply scarred by the ongoing COVID-19 crisis. The impact on human life, health and wellbeing is already immense, while the cost to economies, businesses and livelihoods will be felt for years to come.
Amid the devastation, our shared responsibility to put the lives and health of people first has come sharply into focus. With this renewed recognition, we must look to protect communities and to make them more resilient as we recover and rebuild from the coronavirus. We must build back in a way that protects us from growing systemic risks, whether from future pandemics, or other dangers such as climate change.
It is therefore essential that we ensure the economic recovery is consistent with the achievement of long-term climate objectives, including climate neutrality by 2050 at the latest.
An economic recovery not aligned with these objectives will exacerbate the human and economic risks associated with climate change rather than reduce them. It is absolutely necessary that spending and policy decisions made in the coming months build back better, with plans that create good jobs, cut emissions, improve health through reducing air pollution and increase resilience of people, companies and countries.
New analysis by Oxford University found that “green projects create more jobs, deliver higher short-term returns per dollar spend and lead to increased long-term cost savings, by comparison with traditional fiscal stimulus.”
Similarly, CLG Europe’s new report Working towards a climate neutral Europe: Jobs and skills in a changing world demonstrates how decarbonisation policies are an essential part of a resilient and sustainable labour market.
Business backs carbon neutrality and action on climate
An increasing number of businesses have already recognised the economic benefits of the transition and are taking steps to decarbonise their operations and value chains, while investing for the carbon neutral economy of the future.
To date hundreds of European companies have committed to bold climate commitments, including setting a science-based emission reduction target, switching to 100% renewable electricity with RE100 and accelerating the transition to electric vehicles with EV100. These companies are delivering real-world solutions across energy, transport, consumer goods, the built environment and even high-emitting sectors such as steel, cement and plastics.
As the European Union looks to finalise its stimulus plans to help the economy recover from the impacts of the coronavirus epidemic, a growing number of leading businesses and business networks are calling on government leaders to ensure long-term stimulus spending puts the European economy on a course to a resilient, zero-carbon future that leaves no-one behind.
These companies, from right across the EU, have made their voices heard through articles, social media and most strikingly through a series of high-profile open letters directed at policy makers. These include:
- Over 150 global corporations, which are all part of the Science Based Targets initiative and with a collective market capitalisation of over $2.4 trillion, are urging governments to align their COVID-19 economic aid and recovery efforts with climate science, to reach net-zero emissions well before 2050.
- More than 100 of these companies are headquartered in Europe, including power utilities Iberdrola, Enel and Ørsted, and two of the world’s largest consumer goods companies Unilever and Nestlé.
- 37 CEOs of Europe’s biggest global companies joined the “European Alliance for Green Recovery” along with Ministers from 11 countries and MEPs. These companies were joined by 50 CEOs from the finance sector including BNP Paribas Asset Management, AXA, Allianz, Santander, PensionDanmark et BBVA.
- At the launch of the Petersberg Climate Dialogue, the German business network Stiftung 2° Grad assembled a group of 68 companies to call on the German government to ensure ambitious climate policy as a key part of the coronavirus response packages.
- Similar statements and initiatives were put together by Entreprises pour l’Environnement in France, in Spain through the Grupo Español de Crecimiento Verde (GECV) and the Slovenian national alliance for green recovery set up by CER Slovenia.
- A coalition of 40 global companies, led by the Energy Transitions Commission, called on governments to support “a massive wave of investments in renewable electricity” as part of COVID-19 recovery plans.
- And a group of nine leading companies committed to The Climate Group’s EV100 initiative joined a public business statement to call on the President of the European Commission, Ursula Von der Leyen, to push ahead with 2020 CO2 targets for cars, vans and trucks.
Never before have governments seen such massive support from business to ensure climate neutrality so that we can secure all the benefits that would bring to society.
Companies know that the decisions governments make now will lock in the strategic direction of entire economies for years to come, either helping or hindering the world’s ability to increase climate action at the necessary speed and scale.
The European Green Deal remains the best way to align efforts behind a strong economic recovery that will place Europe in the strongest position to face wider trends including climate change. It is critically important that Europe moves forward and not backwards, strengthening the ambition of the Green Deal, including intermediate targets for 2030 of at least 55%. We need a new Europe that is more resilient and more competitive, an economy that works for people, business and planet.
Given that companies will be the driver for future growth in Europe, it is fundamental that governments send a clear signal through measures that support the climate neutral economy:
- Investment in infrastructure, including in power, transport, homes and buildings, as well as green infrastructure such as nature conservation and land management.
- Investment in innovation, including support to: accelerate the roll out of electric vehicles; innovation for industrial decarbonisation; develop zero-carbon aviation, shipping and freight; and development of a smarter and more circular economy, including reuse of construction materials within the renovation wave.
- Investment in training and education, reskilling the workforce to pave the way for new low-carbon industries.
- Encouraging business best practice, by mandating companies receiving public support to adopt good management systems, including risk disclosures as recommended by the Task Force on Climate-related Financial Disclosures (TCFD), and setting targets and strategies informed by science.
- Maintaining policy certainty, carbon pricing and sticking to the agreed goals. There must be no mixed messages, or stop-start when it comes to environmental protection.
These investments will not only help Europe be on track on its climate commitments, it will also create jobs, increase competitiveness, reduce health impacts and create a more resilient economy that benefits europeans.
Now is the time for Europe to lead and Build Back Better.