The global path to Net Zero is uphill.
The gap between where we are today and where we need to be is massive. According to the UN, carbon emissions increased by 11 per cent since 2010, and we need to achieve a 43 per cent cut by 2030. This is even more challenging in a world facing inflation, wars, and recession.
On a recent trip to the UAE, I was encouraged by the way the country is facing up to the data. The conversations I had with public and private sector representatives focused on the urgent need for action and the importance of an inclusive energy transition, with an emphasis on global representation, innovation, and partnerships that drive real-world outcomes.
The impression given is that the UAE is approaching this task with humility, recognising the challenge society has ahead and the sense of responsibility and urgency required. As we face down the daunting challenges of habitat destruction and climate change, it is crucial we focus on the outcomes of our actions, not just the outputs. In practical terms, that means demanding real-world reductions in emissions, not just disclosure of carbon emissions.
Make that bare minimum agreement
First, we need to agree on key principles, such as a green and fair transition, science-based targets and credible transition plans to net zero, and inclusion of nature and biodiversity in net zero plans. These principles must be global in nature and adopted worldwide.
Second, we need to implement a global standard and taxonomy for ESG data. This standard should be simple and easy for all market participants to understand and contribute to. A common taxonomy with regional thresholds will help to define what is considered ‘green’ and will ensure consistency in reporting.
Third, we need to implement mandatory disclosure from companies and governments. This should include integrated and digital reporting, as well as third-party verification.
Fourth, we need to invest in human capital. The shift towards a more sustainable future will be driven by people, and if we don’t have the right skills and leadership, we will fail. This is why there is a growing emphasis on capacity building and the need for a new leadership team that is bold, ambitious, creative, collaborative, and not afraid of taking risks.
The ‘green’ mission
Finally, green investments need to drastically increase. According to a Bloomberg research, investment in renewable energy sources needs to surpass finance flows to fossil fuels by a factor of four over the next decade. For every dollar currently spent on fossil fuels, only 0.8 dollars are spent on clean energy.
The goal is to change this dramatically, with the world needing to spend 4 dollars in clean energy for every dollar spent on fossil fuels.
The world needs to face data. When we do, there is only one option: to take action. By implementing these steps, we can create a sustainable future that is both environmentally and economically viable. Many of the people I met in the UAE were ready to face the data, and I look forward to continuing these conversations as we build towards COP28 later this year.