Major global companies are pushing world leaders to step up action to tackle climate change at the G7 summit in Germany this weekend, calling for large-scale carbon pricing and measures measures to promote the demand for clean technology.
In an open letter ahead of a three-day meeting that begins Sunday at the Bavarian resort of Schloss Elmau, more than a dozen heads of major corporations including Bank of America and Shell pleaded for fraught climate policies. The government’s ambition is to “bring clarity to the private sector and stability”.
“Once businesses can be sure of a stable and predictable policy environment with well-established goals, we will do all we can to help society achieve this.” there,” they wrote.
The companies have teamed up under the Sustainable Markets Initiative, which was announced by the Prince of Wales in Davos in 2020 and now has more than 400 global executives among its members.
At the summit, the G7 will face the consequences of the war in Ukraine, including the chaos the bloc has caused in global energy markets. European countries including Germany are increase use of coal power to conserve gas reserves after Russia cut supply.
However, SMI members argue that the Ukraine crisis should not undermine efforts to phase out the use of thermal coal, the most polluting fossil fuel, which SMI believes should be banned in advanced countries. by 2030 and globally by 2040.
“Obviously, we are facing a short-term challenge but over time that is a meaningful and achievable goal,” they said.
German Chancellor and G7 President Olaf Scholz promised Last week’s summit will demonstrate that the leading democracies together against Russian aggression are “no less committed to the fight against poverty, the health crisis and climate change”.
Governments are under increasing pressure on climate policy from companies that are worried about continued uncertainty over future regulations and face huge scrutiny of progress their level towards ambitious net zero emissions targets.
Bank of America and other leading American financial institutions have recently faced unsuccessful campaigns by shareholders seeking to block their funding for fossil fuel projects.
Energy companies are also facing skepticism about the speed of their green transition. Last month, 20% of Shell shareholders voted for a resolution saying their climate plan was inconsistent with the 2015 Paris accord, which aims to keep global warming below 2°C. .
SMI’s letter emphasizes carbon pricing, calling on governments to pursue a price on emissions that will rise over time. It says a $30-70 carbon price will destroy the economic logic for coal investment, while a level above $120 will spur investment in technologies like direct air capture, which removes carbon dioxide out of the atmosphere.
The intervention comes amid political efforts around carbon pricing on both sides of the Atlantic. This month, Democratic Senator Sheldon Whitehouse recommend an invoice that would create a carbon tax on imports, initially set at $55 for each ton of associated carbon dioxide emissions.
This week, members of the European Parliament agree on a plan impose a similar carbon tax on imports and expand the EU’s emissions trading scheme – which now includes energy, heavy industry and aviation – to more domestic sectors.
The SMI letter also asks governments to provide “demand-side policies”, such as fixed end dates for petrol car sales and requirements for sustainable fuel use. of airlines.
If the G7 and other governments “can work with the private sector to help accelerate our progress, then we can,” the letter said, in which signatories include leaders of BP, EY, PwC, State Street and Mahindra Group.
