Make no mistake, for business, the overall message from the G7 leaders is clear: fossil fuels are on the way out.
Despite some fudging of words on the deadlines on gas and coal use from the G7 leaders, the private sector cannot deny the clear direction of travel. And this is good news. The recent report from the World Meteorological Organization warns us yet again that time is short to tackle emissions — the vast majority of which come from burning fossil fuels.
Rather than waiting to act until gas and coal phaseout timelines are formally agreed — which they eventually will be — companies should focus on the bigger picture to drive their business decisions.
The G7 leaders’ communique reiterates what was stated by the G7 energy ministers last month: they are committed to accelerating the phase out of all fossil fuels as required to limit the global temperature rise to 1.5C.
This is a clarion call for business to go all in on switching to clean energy right across their value chains to accelerate the energy transition and put themselves in the strongest position to thrive as regulations are implemented across the world to make it happen.
Companies are already facing climate-related risks and impacts and are responding. We are seeing a reduced appetite from corporate buyers for long-term gas contracts that many see as “expensive and risky”. Meanwhile, increased demand for renewables, energy efficiency solutions and electrification demonstrates that clean energy is the growth industry to invest in now to attract investors and talent, cut costs and build resilience in the global economy.
If we focus only on what the G7 didn’t deliver, we risk delaying the transition to clean energy. Let’s recognise the distinct steps forward. This can be a new era of innovation, creativity and economic opportunity if policymakers enable business to move our global economy away from the risk, disruption and unrest of the fossil fuel economy.
Chief Executive, We Mean Business Coalition