- At least one-fifth of the world's largest public companies have committed to net-zero targets and for many, the focus goes beyond their own emissions.
- Major organizations are in a prime position to innovate, finance and install the technology needed for the world to meet its net-zero emissions goals.
- Different companies play different roles, but they are unified in the belief that now is the moment to capitalize on that energy and act.
Across the globe, in large cities and small villages, in both advanced economies and developing ones, the commitment to sustainability and climate action is increasingly woven into daily life.
The challenges posed by climate change are formidable and the sense of urgency to act has never been higher. The world is uniting to address the existential challenge – offering an encouraging sign of shared purpose and common destiny.
Private sector taking the lead on global sustainability
Importantly, we are also at a transformative moment in solving the challenges. Just as the world is prioritizing global action, companies are transitioning to taking the lead in delivering solutions for the decades to come.
Recently, the 2022 Edelman Trust Barometer cited business as the only trusted global institution to address the world’s most pressing problems, which include climate change and the energy transition.
More than one-fifth of the world’s public companies have committed to net-zero carbon emission targets. And more significant than just reducing emissions, these corporate ambitions represent commitments to innovate, finance, and install the technology the world needs going forward.
Transition to global era of sustainability action
As the world transitions to a global era of sustainability action, the who, what, how, and when to succeed in solving the world’s most pressing challenges are transitioning too, with corporations increasingly acting as the unifying theme.
Who: While corporations increasingly are taking the lead on action – particularly through technology and innovation – they are not doing so in a vacuum.
One of the defining characteristics of corporate social responsibility is engagement with stakeholders in real-time. This means that employees, investors, customers, communities, and non-governmental organizations all have levers of influence on corporate action.
And the scope of this influence is both unprecedented and growing. We are in an era where a single shareholder letter, customer email or stakeholder phone call can inject broader considerations into corporate decision making.
The role of governments is also transforming. In the past decades, governments have led environmental action through command and control and other regulatory and policy regimes. Today, government decision-making cannot keep pace with the other stakeholders who exert their influence in a matter of months and weeks.
But in this transformative era, the government has an important, if evolving, role to play. Governments increasingly are partnering with companies to support innovation and breakthrough technologies, sharing the investments, risks and outcomes.
And governments can be a force multiplier for success by creating healthy policy frameworks for technology deployment through tax programmes, infrastructure initiatives and permit streamlining.
What: There are scores of global sustainability challenges including climate change, a just energy transition, environmental protection, healthcare, poverty, human rights, gender and racial equality, and others.
But there is one core theme that runs through all of them: equity. Simply stated, equity is the unifying goal of the global sustainability era.
Ultimately, the goal of global sustainability is about ensuring everyone has the opportunity to live a prosperous life. Perhaps this is best represented by the 17 United Nations Sustainable Development Goals, to which companies are increasingly aligning in expressing their own sustainability priorities.
Here, the global reach of multinational companies is uniquely positioned to pursue the goal of equity, and a just and prosperous life for all people, aligned to the SDGs. This will be on full display at this year’s World Economic Forum Annual Meeting, COP27 in Egypt in November, and COP28 in the UAE in 2023.
While these are broader events by their nature, the theme of equity will be at the forefront – ensuring that while companies contribute technology and innovation to decarbonizing industrial sectors, at the same time they are working to lift up the quality of life for everyone equitably by making sure the benefits of this technology has broad reach.
How: Regardless of the nature of the business, the overarching corporate contribution to addressing climate change and sustainability rests with the ability to innovate and deliver the technological improvements the world needs.
Different companies will have different roles to play, including in innovation, finance and investing, operations, and supply chain and logistics. But technology is where companies will lead change in the upcoming decades.
Have you read?
Here, there are two simultaneous goals: delivering the best technology today to make progress, while innovating the next level step of change necessary to achieve net-zero and other sustainability goals.
That’s why companies like GE at the same time are investing in breakthrough technologies and working with the stakeholders above to finance, deliver, install, and operate such technologies at scale over time.
Our research centres are virtual time machines, showing the evolution of future technologies the world will need to succeed in the upcoming decades.
When: To many stakeholders, the question of when may be the most important for global sustainability. More corporate accountability and certainty regarding the when is one of the hallmark differences about this transformative era of corporate leadership.
Companies increasingly are making commitments regarding their own impact – for climate change, environmental performance, and other environmental, social and governance metrics.
This type of forward-looking forecasting is unprecedented. While there is a fair amount of uncertainty about the future, setting ambitions and communicating transparently about the progress and challenges toward them is a critical new tool for looking forward, not just managing the present and the past.
As for timing, when it comes to climate and the energy transition, much of the world is focused on making significant progress with today’s technology through 2030, while in parallel using this decade to develop a trajectory towards net-zero goals by 2050 with breakthrough technologies.
Global action on sustainability will evolve
But even that is a gross overgeneralization. We’ll see near, mid and long-term goals across companies and sectors, and frequent updates and revisions as technologies and other circumstances evolve.
We’ll have both successes and setbacks and that’s okay so long as we continue transparency. This can enable stakeholders to pinpoint what’s working and identify where additional attention may be warranted.
As a 130-year-old company operating in 175 countries, GE is proud to be among our peers as a company leading corporate action in the era of global sustainability.
What's the World Economic Forum doing about the transition to clean energy?
Moving to clean energy is key to combating climate change, yet in the past five years, the energy transition has stagnated.
Energy consumption and production contribute to two-thirds of global emissions, and 81% of the global energy system is still based on fossil fuels, the same percentage as 30 years ago. Plus, improvements in the energy intensity of the global economy (the amount of energy used per unit of economic activity) are slowing. In 2018 energy intensity improved by 1.2%, the slowest rate since 2010.
Effective policies, private-sector action and public-private cooperation are needed to create a more inclusive, sustainable, affordable and secure global energy system.
Benchmarking progress is essential to a successful transition. The World Economic Forum’s Energy Transition Index, which ranks 115 economies on how well they balance energy security and access with environmental sustainability and affordability, shows that the biggest challenge facing energy transition is the lack of readiness among the world’s largest emitters, including US, China, India and Russia. The 10 countries that score the highest in terms of readiness account for only 2.6% of global annual emissions.
To future-proof the global energy system, the Forum’s Shaping the Future of Energy and Materials Platform is working on initiatives including, Systemic Efficiency, Innovation and Clean Energy and the Global Battery Alliance to encourage and enable innovative energy investments, technologies and solutions.
Additionally, the Mission Possible Platform (MPP) is working to assemble public and private partners to further the industry transition to set heavy industry and mobility sectors on the pathway towards net-zero emissions. MPP is an initiative created by the World Economic Forum and the Energy Transitions Commission.
Is your organisation interested in working with the World Economic Forum? Find out more here.
We’re proud to build on our legacy of innovating technology the world needs to lift up the quality of life for people everywhere solving three of the world’s most pressing global sustainability challenges:
1) Decarbonizing the energy sector while growing access to sustainable, reliable and affordable electricity for the 750 million people who lack access.
(2) A future of flight that keeps people connected in more sustainable ways.
(3) Making precision healthcare more accessible for the half of the world’s population that’s underserved.
We value the opportunity to partner with our stakeholders toward our mutual success toward these critical goals.