Global Summit 2021
Climate change is on the global agenda like never before. Before the Covid-19 pandemic shook the world, we knew that our ways of doing business were unsustainable but it took society grinding to a halt for us to see how imperative it is for companies to collaborate, innovate and adapt to a more sustainable future.
In March 2021, the Climate Governance Initiative hosted its Global Summit – bringing together business leaders, financial experts and academics to discuss the ways in which company boards can push for climate action. Over the five days, a range of speakers shared ideas for, and experiences in, decarbonising business and the ways in which everyone from non-executive directors, to CEOs, to employees can be engaged in the collective fight against global warming.
The week kicked off with a pre-Summit discussion on how culture and art can inspire climate action. We heard from composers, curators and artists that learning to visualise climate change can make it feel more relevant to those of us fortunate to live in countries as yet only mildly impacted by it.
Subsequent panels took us to Scandinavia, where speakers shared numerous examples of good practice in sustainability and corporate governance.
Tuesday marked the first official day of the Summit, with five sessions covering everything from accelerating corporate climate action in Chile to dual board systems in Germany. The World Economic Forum led a discussion on how the global metals and mining industries might reach net zero – including examples of companies that have introduced a variety of approaches such as internal carbon pricing and collaboration with competitors to invest in green research projects.
Change is happening, the experts stressed. Former US vice president Al Gore believes that we’re living through a “sustainability revolution, with the scale and magnitude of the industrial revolution, but moving at the speed of digital revolution”. Following those optimistic remarks at the Summit’s opening session, panellists went on to explore the role of boards in accelerating climate action – arguing that boards need to guide companies towards significant emission reductions within the next ten years.
Strong arguments were put forward for both the oil and gas, and the shipping industries to play a clear role in the net zero journey. There was a panel session on the future of fossil fuels, in which oil and gas CEOs shared the ways in which their companies were diversifying to include greener energy sources, developing carbon farms and installing technologies to capture and remove CO2 via direct air capture.
It’s often hard to predict what kinds of physical risks a business might face in the future, but on the second day of the Summit, panellists were put to the test by joining a fictitious board hampered by four climate-related issues. Experts from Heathrow, Chapter Zero, Willis Towers Watson and Clyde & Co were asked how they might deal with everything from flooding to humidity-related contamination and chain supply issues, and the ways in which their hypothetical company ‘OurCo’ could avoid further risk.
A key issue brought up again and again over the course of the week was the lack of climate education on boards, and the risk of greenwashing. A number of the summit sessions looked into ways both might be abated, with a discussion on building effective climate governance for the Islamic finance industry offering a number of interesting suggestions. Panels argued that emerging economies can’t be ‘locked’ into conventional fossil fuel technologies, and that carbon taxes on public goods could be introduced – alongside proving to boards that going green can be profitable.
The Summit ended with five sessions looking into the practical measures open to businesses who want to be more transparent in their sustainability journeys. INSEAD hosted a panel on the types of opportunities that can arise from carbon markets and the broader impact of offsetting funds. During a chat about executive compensation and climate targets, we heard how institutional investors like BlackRock have gone beyond setting sustainability goals and now take action against companies deemed not to be making sufficient progress on climate issues.
One of the countries significantly at risk of inaction is Brazil, with the penultimate session looking into how carbon pricing is just one of the tools needed to neutralise the destruction of the Amazon rainforest. The introduction of a carbon market would present a whole range of incredible opportunities for the country, including becoming a world leader in the net zero transition.
The final discussion, hosted by the World Economic Forum, confirmed what many of the previous panels had stressed: collaboration is essential for fighting climate change. Very little can be done unless industries come together to future-proof business. In the Race to Zero, companies must come together with shared, ambitious long-term visions. And when collaborative effort meets effective climate governance, the race can be won.