New research indicates that over 30% of respondents are likely to rely on fossil fuels well beyond 2050

Fossil fuels and achieving net zero emissions.

The We Mean Business Coalition (WMBC) has just unveiled its Corporate Climate Stocktake, which presents a comprehensive overview of the private sector’s progress toward achieving net zero emissions while also highlighting the challenges that still need to be addressed.

The Corporate Climate Stocktake (CCST), released ahead of the global stocktake, scrutinizes the advancement of eight key industries as they strive to reach their net zero targets. Although there has been some commendable progress, it is evident that companies require greater support from their respective governments. The WMBC is advocating for enhanced collaboration and systemic change that transcends the efforts of individual businesses.

In 2015, global leaders embraced the Paris Agreement, a legally binding international treaty that committed signatory nations to taking meaningful action on climate change. Fast forward eight years and a Global Stocktake of their collective progress is on the agenda at the UN’s COP28 convention on climate change. It is clear that governments alone cannot catalyze the profound transformation needed to achieve net zero goals and limit global warming to below 1.5°C, as stipulated by the Paris Agreement. The private sector must also play a pivotal role in ensuring a sustainable future for generations to come.

With this imperative in mind, the WMBC has unveiled its Corporate Climate Stocktake, which complements the UN’s assessment of national progress by shedding light on the private sector’s accomplishments thus far. Maria Mendiluce, the chief executive of the WMBC, underscores the importance of using these insights to inform policies that can facilitate businesses and sectors in achieving net zero targets in accordance with scientific requirements.

Climate Champions Team

The CCST conducted its research in collaboration with Bain & Company and the UN’s Climate Champions Team, surveying 250 global business leaders. The report also incorporates in-depth interviews with industry experts and a thorough examination of forward-looking indicators based on current corporate commitments, involving more than 300 companies.

The CCST primarily focuses on eight industrial sectors responsible for roughly two-thirds of global emissions, including agriculture, concrete and cement, power, steel, aviation, road transportation, shipping, and hydrogen. Across these sectors, some encouraging trends are emerging. Clean technology adoption has significantly accelerated in recent years, costs are beginning to decrease, and learning curves are flattening.

Meeting science-based targets

However, the majority of surveyed business leaders express concerns that progress is not happening quickly enough. Alarmingly, over 30% of respondents indicate that their companies are likely to rely on fossil fuels well beyond 2050, despite public commitments to reach net zero emissions before then. Several barriers are cited consistently, including commercial constraints, the absence of enabling infrastructure, the availability of sustainable resources, technical complexities, and regulatory red tape. Even the most ambitious companies are struggling to meet science-based targets, and without stronger policy support, the economic viability of transition remains in question.

The CCST goes a step further by offering a detailed breakdown of each prioritized sector, offering a more nuanced understanding of the ongoing progress and the obstacles faced.

One prominent challenge arises in the agricultural sector, which contends with the carbon emissions associated with land-use conversion. Despite stringent regulations against deforestation, the demand for commodities linked to deforestation continues to rise. Companies may publicly pledge to sever ties with at-risk regions and suppliers, but there are financial incentives to ignore these commitments. Livestock consumption continues to increase, driving further expansion, despite potential environmentally friendly solutions like feed additives or anaerobic digestion.

On a positive note, the adoption of regenerative agricultural practices is on the rise, and this trend could be accelerated with technical support and financial backing to cover upfront investments or potential productivity declines during the transition.

Low-carbon technologies

The steel industry faces challenges of its own, as low-carbon technologies are available at a commercial scale but come with a 20% cost premium compared to conventional methods. Surveyed leaders in the sector do not foresee these technologies becoming competitive anytime soon. The main barriers here include the lack of sustainable inputs, technical hurdles, commercial realities, and the need for suitable infrastructure. While progress is evident in some regions, emerging economies with surging demand still heavily rely on traditional intensive processes.

The cement and concrete industry encounters analogous challenges, with approximately 88% of its emissions stemming from clinker production. The adoption of clinker alternatives such as fly ash, ground granulated blast furnace slag, calcined clays, and alternative pozzolans is hindered by limited availability and high costs. Resistance from construction companies and technical issues further impede adoption. Efforts to transition the industry include moves towards electrified or biomass heating and the development of carbon capture technologies, but upfront expenses and infrastructure availability remain significant obstacles.

In summary, while each of the scrutinized sectors faces unique challenges, the proposed solutions are remarkably consistent. Throughout its Stocktake report, the WMBC emphasizes the need for international collaboration and transformative systemic changes that transcend the efforts of individual businesses.

It is evident that a deep dive into existing markets and their reconstruction in alignment with a sustainable future is urgently required. Governments must work together to connect the dots between incentivizing the adoption of new technologies, regulating the management of vital resources, and fostering demand for more sustainable products and services that emerge as companies receive the necessary support for innovation. This holistic approach is crucial for achieving net zero goals and averting the worst effects of climate change.