CEOs urge drastic action from COP28 as temperatures continue to rise

A coalition of some of the world’s leading CEOs have told delegates arriving in the UAE for the COP28 summit that action needs to be taken now as the status quo “is no longer an option”.

In the lead-up to the UN’s COP28 climate conference, the world’s largest CEO-led community has urged businesses and governments to pledge to further and significant reductions in global carbon emissions to meet the Paris Climate Agreement goals.

As Europe’s climate monitoring organisations warned this week that the year was set to be the hottest in history and was in course to “obliterate” previous records the Alliance of CEO Climate Leaders, has published a new report which calls for emissions to be cut by 7% each year from now until 2030 to limit global warming to 1.5°C, as agreed in Paris in 2015.

“The urgency and scale of the climate crisis demand immediate and coordinated action at a global level,” said Pim Valdre, head of climate ambition initiatives at the World Economic Forum. “The cost of inaction is simply too high, and our shared responsibility is to secure a sustainable and prosperous future for all.”

The report, The State of Climate Action, says that “dramatic action” is needed to close the gap. This includes shorter-term net-zero national and corporate commitments, faster deployment and funding of green technologies, and stronger global collaboration to ensure a just transition. The report follows an open letter from more than 100 CEOs and senior executives from the Alliance to world leaders ahead of COP28 urging for a phase-out of fossil fuels and a massive scale-up of renewable energy and carbon removal.

“The findings in this report are a wake-up call to the world, reaffirming that the status quo is no longer an option,” said Rich Lesser, global chair of Boston Consulting Group and chief advisor to the World Economic Forum’s Alliance of CEO Climate Leaders. “Governments, companies and other stakeholders must act in lock step to meet our ambitious climate goals. It is our collective responsibility to build a more resilient and greener future for generations to come, and we are unwavering in our mission to make that a reality.”

The Alliance of CEO Climate Leaders, facilitated by the World Economic Forum, consists of more than 120 top companies from diverse industry sectors and regions, representing more than $4 trillion in total revenues and 12 million employees.

According to the report, as of mid-2023, the share of global emissions covered by national net-zero targets exceeded 80%, up from virtually zero only a few years ago. However, only a third of global emissions are covered by net-zero targets for 2050, the estimated timeframe required to maintain a 1.5°C limit, with most national net-zero targets set for longer timelines. The shorter-term gap is even more significant, with only 20% of emissions also covered by Nationally Determined Contributions (NDCs) aligned to a 1.5°C ceiling.

“Stronger commitments and actions are most critically needed from the 10 largest national emitters, which account for half of the gap,” it added. “On the corporate side, progress in recent years has been substantial. The total number of companies with commitments to 1.5°C science-based targets has increased more than six-fold between the end of 2020 and August 2023. However, fewer than 20% of the world’s 1,000 largest companies have set this type of target, and almost 40% have no net-zero commitment at all.”

The report said most green technologies required to achieve net zero exist already, but those that are or soon will be cost competitive would only cover around 55% of global emissions. Others, including “deep decarbonisation” technologies, such as hydrogen, carbon capture, usage and storage (CCUS), and direct air capture, are still in early stages of development and scaling too slowly. To catch up, innovation and industrial scaling need to accelerate at nearly unprecedented levels.

Among key root causes, an over $2 trillion gap in yearly climate funding remained in 2022, with critical gaps in early technologies and infrastructure: bioenergy, hydrogen, sustainable aviation fuel, CCUS and battery storage collectively received only around 2% of 2022 global mitigation funds, the report explained. The gap is also twice as large in lower-income countries as in higher-income ones, with the former subject to lower capital availability and higher perceived risks.

“The urgency and scale of the climate crisis demand immediate and coordinated action at a global level, the cost of inaction is simply too high, and our shared responsibility is to secure a sustainable and prosperous future for all.”

Pim Valdre, World Economic Forum