Business leaders have warned that without bold government policy, the next wave of large-scale investments in the net zero transition are at risk. An overwhelming 91% of executives see the transition as an investment opportunity, based on responses from 250 executives of leading businesses worldwide, with a combined market capitalisation of more than $2 trillion. However, only 1% of businesses believe the transition is on track.
The warning comes in a new report launched today by the World Business Council for Sustainable Development (WBCSD) in partnership with the Breakthrough Agenda, with the support of Bain & Company, the Race to Zero and the Marrakech Partnership. The report is the first annual pulse check from leading businesses on the opportunities and challenges of the net zero transition, and where governments need to focus effort to create stronger market incentives.
From an international perspective businesses stress the need for deeper and more effective coordination between major economies with over three-quarters saying it is highly important for the net zero transition, but only a quarter saying it is currently effective. Businesses highlight:
- Harmonized standards and definitions are essential: Global alignment on standards and definitions for key technologies – such as hydrogen, steel and batteries – is a prerequisite for market integration. Businesses are frustrated by the pace of development with fragmented approaches slowing investment, technology adoption and hindering cross-border trade.
- Stronger demand-side policy coordination would grow new markets faster: Greater demand-side policy alignment between countries, including on green product mandates, phase-out dates and public procurement targets would accelerate the scale-up and diffusion of technologies through global markets and spread the risks and costs between countries.
- Fit-for-purpose and aligned trade rules: transition-leading businesses are supportive of international trade rules that incentivize decarbonization efforts but are seeking consistency and careful design that avoids distorting global markets and increasing trade tensions and fragmentation.
- Cross-border infrastructure development: for specific sectors including power, hydrogen and road transport, businesses call for stronger regional coordination to enable markets to reach scale faster and deliver benefits to consumers.If you would like read the full report and sector breakdowns, please click on the link below.Find out more