CBI boss challenges governments on net zero

Governments across the world need to "get serious" about climate change and adopt effective policies that will enable industries to implement net-zero practices, according to the head of the UK's largest business organisation.

Photo of COP26 temporary venue in Glasgow
Tony Danker, Director-General of the Confederation of British Industry (CBI), told a dinner at the COP26 climate conference in Glasgow that governments must change from being "green rule-makers...and learn to become green market-makers”.The CBI event was attended by global business leaders and speakers including United States Special Presidential Envoy for Climate, John Kerry, New Zealand Prime Minister, Jacinda Ardern, and the UK's Chancellor of the Exchequer, Rishi Sunak.
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'Step up and lead'

Mr Danker said that while more decisive action was needed from governments, he accepted that "this is a moment in history where every firm needs to step up and lead".He added: “Regardless of political progress, we in business are ready, willing and able to deliver a net zero world. Bold targets or timid ones. Total agreement or partial agreement. I don’t believe any of you have come to Glasgow to give the job to someone else. This job is on us.”Mr Danker said that businesses that failed to embrace net zero would get left behind and that, while governments had been making some progress at COP26, it was only serious business action that could keep the target of a 1.5 Celsius temperature rise alive.“We cannot achieve net zero without clean energy to power our world. Without foundational industries – from agriculture, to mining, to building – shifting to sustainable ways of working," he said.“Without cleaner transport, greener manufacturing, and more sustainable products. Without technological breakthroughs in every part of the value chain, to protect nature and sustain the resources we use every day."

Partnership between business and governments

Mr Danker said that success in achieving net zero emissions rested on the inter-dependence of government and business. For the latter, it was not just an environmental imperative but as commercial imperative, too, because customers, clients, investors and shareholders would expect nothing less."To put it bluntly, in purely commercial terms, the cost of inaction is, for the first time, higher than the cost of action," he said.“Yet there is an emerging gap now between firms who want to be at the forefront of the net zero transition and those who are resisting the inevitable. It’s time for firms to choose – either lead the way or be left behind.”For their part, political leaders now needed to get serious about the action required to enable businesses to be successful, Mr Danker maintained.He said governments must design markets correctly to let capital supporting sustainability projects to be deployed, and there must be international agreements and standards to ensure that companies can move green innovations across borders.

Supply-side interventions

Mr Danker called on governments to pump-prime nascent markets, such as hydrogen and battery cell production; to design market mechanisms that "guarantee investible propositions with returns", such as contracts for difference in offshore wind; to rebalance economic regulation to give investment and innovation equal status; and to use taxation to incentivise companies who make green choices – and penalise those who do not.On the UK’s journey towards net zero, Mr Danker said: “Every sector in our economy is grappling now with the real consequences of what decarbonisation does to our business models, our customer propositions, and our economics. I am convinced that the pain of doing this faster than others will bring us even greater opportunities on the other side.“That is why we at the CBI have put decarbonisation at the heart of our economic vision for the UK. Why we are working tirelessly with the UK government on how to ensure climate change policy unlocks green investment – nationally and globally."

Read more news and views from David Sapsted

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