4 ways to build a net-zero economy by 2050

This article is brought to you thanks to the collaboration of The European Sting with the World Economic Forum.

Author: Veronica Scotti, Chairperson, Public Sector Solutions, Swiss Re Management Ltd

• EU Green Deal, worth €1 trillion, puts Europe on course to meet net-zero targets by 2050.
• Multi-stakeholder approach is needed to build momentum and achieve these goals.
• Here are four ways the private and public sector can help to reduce carbon emissions.

As we emerge from the shadows of the COVID-19 pandemic, a green recovery will help stabilize and grow our economies for a more resilient future. The EU Green Deal puts Europe on course to reach net-zero by 2050, and includes €1 trillion of investment in climate action.

Alongside important policy commitments, we have already seen admirable emissions targets from leading companies across the continent. But there is still more work to do, and a multi-stakeholder approach will enable faster progress. As we look to accelerate movement on climate goals, these four pillars will support our shared ambition.

1) More ‘mission-possible’ partnerships

We need cross-industry solutions to accelerate the reduction of carbon emissions, especially for critical sectors of our regional economy.

For example, 120 companies across the maritime, energy, infrastructure and finance sectors are working collaboratively on the reduction of shipping emissions as part of the Getting to Zero Coalition, which aims to decarbonize shipping in a way that drives green growth.

The successful development of low-carbon technology and zero-emission marine fuels could help to build investment in new energy projects in emerging markets. European ports at the heart of the global supply chain, such as Helsinki and Hamburg, are also working with the shipping industry to lower emissions through reduced usage fees.

The Race to Zero initiative championed by COP26 (the United Nations Climate Change Conference to be held in Glasgow in November 2021) offers an opportunity for many more industries to establish their own partnerships to make net-zero “mission possible”.

2) Clear, quantitative interim targets

In the pursuit of making the EU carbon neutral by 2050, companies and governments should be transparent in seeking specific targets.

In this context, we principally need to agree that the focus must shift from carbon offsetting practices (which do not address footprint issues) towards carbon reduction and carbon capture priorities (which change the way we consume, operate and contribute to the problem).

By 2050, the carbon removal industry is expected to grow to the size of today’s oil and gas industry. To reach that point, we need to invest in scaling-up new technologies such as direct air capture − while pursuing ambitious emissions reduction through the use of cleaner energy and fuels, boosting the circular economy and promoting sustainable consumption.

What’s the World Economic Forum doing about climate change?

Climate change poses an urgent threat demanding decisive action. Communities around the world are already experiencing increased climate impacts, from droughts to floods to rising seas. The World Economic Forum’s Global Risks Report continues to rank these environmental threats at the top of the list.

To limit global temperature rise to well below 2°C and as close as possible to 1.5°C above pre-industrial levels, it is essential that businesses, policy-makers, and civil society advance comprehensive near- and long-term climate actions in line with the goals of the Paris Agreement on climate change.Global warming can be beaten thanks to this simple plan

The World Economic Forum’s Climate Initiative supports the scaling and acceleration of global climate action through public and private-sector collaboration. The Initiative works across several workstreams to develop and implement inclusive and ambitious solutions.

This includes the Alliance of CEO Climate Leaders, a global network of business leaders from various industries developing cost-effective solutions to transitioning to a low-carbon, climate-resilient economy. CEOs use their position and influence with policy-makers and corporate partners to accelerate the transition and realize the economic benefits of delivering a safer climate.

Contact us to get involved.

3) Harmonization of practices, policies and standards

Alignment on climate initiatives across leading companies can be a powerful lever for bringing our efforts to the mainstream and accelerate adoption by enterprises of any size, in any sector. It’s important for us, as corporate pathfinders, to lead by example for both supply chains and the general public.

For example, the Net-Zero Asset Owner Alliance—a group of more than 30 institutional investors representing $5 trillion in assets—are committed to transitioning their investment portfolios to net-zero by 2050. This will, in part, be achieved by advocating for stronger public policy and corporate commitments on decarbonization: in November 2020, the group called for the cancellation of all new thermal coal projects.

Meanwhile, The Principles for Responsible Investment created in 2006, to embed environmental considerations into corporate policies and practices, now have more than 3,000 signatories responsible for over $103 trillion in assets. Thanks to the involvement of the investment community, intergovernmental organizations and civil society, the principles are helping to make investment more sustainable.

4) More robust public-private partnership frameworks

We have a collective responsibility to work together and take action and we need stronger frameworks and more agile processes to help accelerate the transition to a low-carbon or net-zero economy.

We need faster and more creative approaches to defining such frameworks. Traditional, lengthy consultation and political deliberation ‘top-down processes’ are ill-suited for the urgent task at hand.

The European Investment Bank’s funding of climate action and environmental sustainability over the next decade gives Europe’s public and private sector the opportunity to make substantial progress towards a carbon-neutral future; let’s seize this opportunity.

At Swiss Re, we believe in the power of evidence based arguments, and have worked with governments around the world on innovative nature-based solutions, such as a dyke reinforcement to protect against rising sea levels around Texel Island in the Netherlands. By mitigating the risk of this project with the appropriate insurance cover, we helped to create benefits including improved climate and water quality regulation.

We must act now

At Swiss Re, we have learned the importance of these four pillars through 20 years of working towards sustainable growth. We have worked on partnerships and solutions on climate change, on ESG business practices, on net-zero investment targets and more recently, on concrete pathways to the decarbonization of critical sectors of the economy where we are a risk-bearing partner.

So, it is particularly exciting for us to witness the added momentum of the World Economic Forum’s CEO Action Group for the European Green Deal − a group brought together in January 2020 to help generate a transformative green agenda.

As the leaders of corporations from diverse industries across the continent, we see the EU Green Deal as a unique and timely opportunity on which we must capitalize. We also know we will be judged by our actions—rather than just our statements—in creating a zero-carbon world. Together, we have the chance to help drive the creation of new industries, new employment and new growth, in line with the United Nations Sustainable Development Goals agenda and The Paris Agreement.

The eyes of nearly 450 million people across Europe are on us. The time to act is now.