Alliance of CEO Climate Leaders urge world govts to scale up investment in renewable energy ahead of COP28

More than a hundred CEOs and senior executives from the Alliance of CEO Climate Leaders, led by Vincent Clerc, Chief executive Officer of A.P. Moller Maersk, have shared an open letter to world leaders ahead of COP28.

The quest to cap global temperature rise at 1.5°C faces jeopardy without intensified public-private collaboration for emissions reduction across value chains.

Alliance members pledge 1.0 Gt CO2e cut by 2030, showing potential for impactful climate change mitigation. Yet, government support is vital, as complex regulations, grid inadequacies, technology bottlenecks, and divergent reporting standards pose formidable challenges.

The letter urged for a massive scale-up of investment in renewable energy and power networks and streamlined permitting and regulatory processes.

Global renewable energy investment soared to a record $0.5 trillion in 2022, yet it falls significantly short of the annual $1.5 trillion required by 2030. Governments must swiftly amplify renewable energy efforts, enhance grid infrastructure, and draw in private sector capital. Concurrently, stronger policies and targets are necessary for improved private sector energy efficiency.

The International Energy Agency reports that global fossil fuel subsidies for consumption hit a record high at $1 trillion in 2022, an unsustainable trend. Governments must responsibly phase out these subsidies, channeling resources toward clean energy and bio-based solutions via incentives such as the US Inflation Reduction Act and the EU Net Zero Industry Act. Equally important is reskilling workers for the energy transition.

To accelerate decarbonization, the industry must address cumbersome permitting processes, which currently lead to protracted build times for utility-scale solar and wind projects. Streamlined policies are essential to hasten renewable energy projects and infrastructure expansion while upholding just transitions, community interests, and environmental standards, the letter said.

The letter added that the governments need to lead by example on public procurement practices, turbocharge nature, and technology-based carbon removals as well as simplify and harmonize climate disclosure and measuring standards.

“In addition to calling on global policy-makers to act, we call on fellow business leaders to join us and raise their ambition by setting science-based targets and increasing the transparency of their emissions by publicly disclosing emissions data through entities such as CDP. Companies should engage their suppliers and customers to advance emission reductions across the full value chain,” the letter reads.

“The private sector needs to continuously increase its investments in energy efficiency, carbon reduction and technology- and nature-based removals. This collective action will not only amount to a meaningful contribution to global climate goals but will also drive sustainable value – the energy transition alone is expected to create an additional 51 million jobs by 2030.”

The alliance concluded that deeper collaboration in the areas of greatest impact between business and government is needed to accelerate net-zero actions for the benefit of society, public health, and the global economy.

“Today, I stand alongside my peers in the Alliance of CEO Climate Leaders, a coalition convened by the World Economic Forum, to send a resounding message to world leaders as we gear up for COP28: the time for action is now,” Vincent Clerc, CEO of A.P.Moller Maersk, said.

“We all know the pathways and solutions to get us to net zero. Success is dependent on government support to overcome the challenge of filling the price gap between fossil and fossil-free fuels. A rapid increase in public-private collaboration is key to accelerating emission reductions across global value chains.”

“We need to look together at production incentives for promoting the rapid scaling up of new technologies as well as practical and effective pricing mechanisms that incentivize the use of green fuels. Moreover, we need a suitable grid infrastructure capacity to adequately integrate an increasing share of renewable energy and ensure consistency and compatibility among reporting standards that diverge across sectors and jurisdictions,” he added.

The signatories of the letter include among other names Björn Rosengren, CEO of ABB, Pascal Soriot, CEO of AstraZeneca, Peter Grauer, Chairman of Bloomberg, Ignacio S. Galán, Executive Chairman of Iberdrola, Brad Smith, Vice Chair and President of Microsoft, Mads Nipper, Group President and CEO of Ørsted, Roland Busch, President and CEO of Siemens AG and Henrik Andersen, President and CEO of Vestas Wind Systems.