Corporate Climate Stocktake 2023 - Bain & Company
CORPORATE CLIMATE STOCKTAKE 2023 - We Mean Business Coalition
The Corporate Climate Stocktake offers a unique snapshot of corporate climate action today and examines what this means for delivering emissions reductions tomorrow.
At COP21 in 2015, with the negotiation of the landmark Paris Agreement, world leaders agreed that in 2023 they would take stock of their collective efforts to meet its goals. As nearly 200 nations prepare to meet in Dubai this year for COP28, the culmination of the first UNFCCC Global Stocktake represents a critical moment to course correct and to accelerate climate action where it is most needed. And as nation states are taking stock, so is business.
The Corporate Climate Stocktake (CCST) led by the We Mean Business Coalition and supported by the UN Climate Champions team and Bain & Company, represents the most ambitious, forward-looking review to date of private sector progress, obstacles and opportunities for achieving net zero. Looking in detail at eight sectors – power, road transport, concrete & cement, steel, shipping, hydrogen, aviation and agriculture – the research presents progress against international or national targets, and identifies the barriers faced by businesses that are rapidly decarbonizing to meet their climate targets.
The private sector has a fundamental role to play in implementing the solutions that will get the world to net zero. This means it is vital to understand business views on decarbonisation. Based on surveys of 250 business leaders and detailed interviews with sector leading companies, industry experts, as well as an assessment of forward-looking indicators and corporate commitments, the Stocktake has captured evidence from business leaders at the forefront of driving the change in their industries. This allows us to better understand the pace of change in each sector, the barriers they are facing, and what our most ambitious companies need from governments to go faster.
The transition to clean technologies is accelerating. In some sectors the rates of investment are small scale, and there are only hints of early adoption of clean technologies. But in other sectors, where technologies are more mature, and market incentives and societal needs align, change is happening at an unprecedented pace and the rates of clean technology adoption have confounded expectations.
Across all 8 sectors of the included in the Corporate Climate Stocktake, the evidence from business leaders and industry experts is striking. The rates of adoption of clean technologies are increasing, while costs are falling, as businesses invest in bringing new technologies down learning curves and up deployment curves.
Latin American countries are scaling clean energy fast enough to achieve their 2030 targets
Within the next five years, electric vehicles will reach satisfactory ranges for 97% of consumers
Better batteries mean light electric freight show a total cost of operation parity with ICE trucks in 10 years
75% of European and North American business leaders say they can shift away from blast furnace steel by 2050
Nestlé, DSM and many startups are investing to curb methane emissions from livestock with technology
By 2030, 50x the production capacity (12Mt) will be available for Sustainable Aviation Fuel compared to today
System constraints and commercial realities
While signs of progress are everywhere, action to cut emissions is not happening fast enough. Global energy-related CO2 emissions are still growing, driven primarily by the burning of fossil fuels. Despite the numerous success stories, we are not getting fossil fuels out of the economy at the pace science says is required. Overall, business leaders remain concerned about the progress of the transition. Under current conditions, over 30% of those surveyed conclude that their company will still be reliant on fossil fuels into the 2050s. This is despite many having set net zero targets well ahead of this date.
In every sector, business leaders point to a range of transition barriers which are holding them back – from the availability of infrastructure to the realities of commercial incentives. While we can be cautiously optimistic about the pace of transition in some sectors, even ambitious companies at the forefront of innovation are struggling to meet science-based targets. For many, accelerating clean energy investment runs up against market fundamentals – there is a limit to the scale and size of the green premium available for low carbon steel, cement, and sustainable aviation fuel. For others, they simply cannot transition absent wider changes to their market or policy environments.
Related Knowledge Center: Climate economics
Climate change is now a driver of the world’s economy. The impact is profound:
- Catastrophic weather events — hurricanes, floods, droughts, high temperatures — are more frequent and more extreme. The cost can be measured in both the initial damage caused and the longer-term impact on the economy.
- Vulnerable communities are increasing climate-related investments, hardening infrastructure and taking other protective measures.
- Investment in carbon capture and storage technologies is increasingly rapidly.
- Governments are making investments and crafting regulations to reduce emissions of carbon dioxide and other greenhouse gases.
On top of all of this is the cost of uncertainty. As the Fourth National Climate Assessment, released in 2018 by the U.S. Global Change Research Program, says, “The assumption that current and future climate conditions will resemble the recent past is no longer valid.”