Every second counts in the race to halt the rise in the planet's global temperature and achieve carbon neutrality - and this requires ambitious targets, immediate measures, and collaboration between the public and private sectors. More than 100 leaders of major global companies, including Miguel Stilwell d'Andrade, CEO of EDP, have sent an open letter to the world's political decision-makers to address these challenges. The letter emphasises the need for collaboration between the public and private sectors and proposes four urgent actions that must be taken.

The World Economic Forum has promoted the Alliance of CEO Climate Leaders since 2014 to encourage governments and political decision-makers to support bold climate action. The Alliance is now making a public appeal to anticipate critical issues that will be discussed during the upcoming United Nations Climate Conference, COP28, at the year’s end.

“As the CEO of a company leading the energy transition and committed to ensuring a better future for all, I am proud to endorse the Alliance of CEO Climate Leaders open letter ahead of COP28, promoted by the World Economic Forum”, says Miguel Stilwell d’Andrade, CEO of EDP. “Along with more than 100 Alliance members, I believe that the policy changes outlined in the open letter can drive outsized impact, and I look forward to presenting these important suggestions to policymakers both at COP28, where EDP plans to play once again an active role in high-level debates, showcase its innovative and sustainable projects and best practices, and reinforce its climate action commitments towards net zero targets and a more sustainable planet.”

Various companies, including EDP, Enel, Engie, Naturgy, Iberdrola, and Orsted signed the letter. They all share a common goal to reduce emissions by a total of 1 Gt of CO2e by 2030 and promote ambitious decarbonisation and carbon neutrality targets in the near future. However, there are still several challenges and issues that could affect the success of these plans. Urgent action is needed from governments and more effective public policies to overcome these challenges.

The letter highlights four significant difficulties that hinder the progress of renewable energy projects and the adoption of innovative and sustainable solutions. These include excessively bureaucratic processes and complex regulation that cause delays, a lack of adequate grid infrastructure, technological constraints that slow down manufacturing capacity for early-stage decarbonisation solutions, and limited harmonisation and interoperability between standards across different sectors and jurisdictions.

Business leaders have proposed immediate actions to address these challenges. In addition to these proposals, the business leaders are challenging the private sector to continue increasing its investments in energy efficiency, carbon reduction and removal based on technology and nature. This collective action will not only make a significant contribution to meeting global climate goals but will also generate sustainable value - the energy transition alone is expected to create an additional 51 million jobs by 2030. This is why deeper collaboration between companies and governments is needed in the different areas with the greatest impact.

Four steps to accelerate the race to net-zero

To this end, the open letter launches four proposals for action to regulators and political decision-makers that, from the perspective of companies, can help maximise the positive impact of climate action:

1. Strongly increase investment in renewable energies and electricity grids and simplify authorisation and regulatory processes

Despite global investment in renewable energy reaching a record $0.5 trillion by 2022, it is still less than a third of the annual investment needed by 2030. Therefore, governments need to rapidly scale up renewables and invest in the necessary grid infrastructure, including energy storage and supporting supply chains, to increase private sector capital and incentivize the private sector to improve energy efficiency. In addition, governments should phase out fossil fuel subsidies in a fair and equitable way. Financing clean, bio-based energy solutions through incentives such as the EU's Inflation Reduction and Net Zero Industry Acts, and retraining workers in the energy transition, should also be prioritized.

Cumbersome permitting processes are also slowing down decarbonization efforts. According to recent estimates, utility-scale solar and wind projects can take anywhere from four to ten years or more to complete, depending on the geographical location. Therefore, there needs to be a policy shift to accelerate renewable energy projects and infrastructure while respecting a just transition, local communities, and environmental standards.

2. Setting an example in public procurement practices

Public procurement plays a significant role in the GDP, accounting for 14% in the European Union alone. The considerable purchasing power it holds can greatly impact the reduction of emissions. If 14% of an economy adopts low-emission procurement practices, it sends a strong signal to suppliers to improve their products and services, encouraging the adoption of innovative solutions.

3. Accelerate carbon reductions based on nature and technology

Although mitigation efforts are crucial, we must also accelerate investments in technology and nature-based carbon reduction to mitigate the growing risk of exceeding a 1.5°C temperature rise. Governments should establish ambitious targets, integrate them into national plans, biodiversity strategies, and action plans, and develop regulations that support the conservation and regeneration of existing carbon sinks. Furthermore, governments should encourage business investment through regulatory frameworks and carbon markets, including high-quality credits and a carbon pricing approach that accurately reflects the true costs of climate change.

4. Simplify and harmonise climate disclosure and measurement standards

Having harmonised climate disclosure and measurement rules is crucial in providing transparent and high-quality information, while ensuring efficiency. We urge all standardisation bodies, including the International Sustainability Standards Board (ISSB), the European Commission, the US Securities and Exchange Commission (SEC), and other regulatory bodies, to continue working towards harmonising reporting requirements, ensuring interoperability and reciprocity for the betterment of all.

You can read the open letter here and have more detailed information.