While the COVID-19 pandemic and Russia’s war in Ukraine will be the focus of the gathering of business and government leaders from the World Economic Forum, so will climate change. He captured the world’s attention in an unignorable and devastating way.
The accelerating rise in temperatures, the ferocity and cost of major weather events, and the impact, particularly on people in developing countries, have escalated the issue from a scientific question to something that affects all aspects of life, including (or, perhaps especially) business and economics.
Of the approximately 270 panels from Monday to Thursday, a third relate to climate change or its direct effects. US climate envoy John Kerry, Ugandan climate activist Vanessa Nakate and Alok Sharma, chairman of last year’s international climate conference COP26, are among the climate leaders expected in the Swiss resort town of Davos .
At the forum’s first in-person gathering in two years, the climate panels are as varied as the issue. They range from tackling “eco-anxiety” to helping debt-ridden countries fund a sustainable transition. Here is an overview of some broader themes that are likely to emerge:
ENVIRONMENTAL, SOCIAL, GOVERNANCE
Several panels will discuss an investment approach that takes into account the environment and other key factors. Known by the acronym ESG, it has become a force, with trillions of dollars invested in companies that meet certain criteria.
When it comes to climate change, ESG can be important. From individual investors to corporations and government agencies that analyze how companies operate, disclosures and public statements are paramount. They can serve as the basis for assessing a company’s emissions, environmental impact and financial risks related to climate change.
They are also controversial and raise questions: should certain declarations be mandatory? Should they be standardized and regulated, and by whom? Or has the ESG movement already gone too far, ultimately hampering investment and doing little to rein in greenhouse gas emissions?
Viewpoints sometimes come down to political lines. In the United States, many Republicans call them “woke,” while many on the left, especially environmentalists and activists, say increased reporting and transparency could lead to real change.
Many managers of some of the world’s largest mutual funds have claimed that ESG is key to assessing risk. Just last week, Tesla CEO Elon Musk said the approach had “been weaponized by fake social justice warriors”.
ENERGY TRANSITION AND ‘NET ZERO’
The world’s top climate scientists have warned that a significant reduction in greenhouse gas emissions this decade is needed to minimize warming and avoid the most devastating effects on the planet. This will require major changes in the way business is conducted, from how products are made to how they are transported.
Several panels will examine where companies have successfully transitioned much of their energy portfolio to renewables, the role of finance and government in inducing or forcing change, and strategies for holding companies accountable. Despite increased awareness and corporate promises, emissions are rising worldwide.
“Moving the Climate Debate from Ambition to Achievement” is the title of a panel that sums up the enormous challenge.
Sessions will focus on sectors such as the decarbonization of shipping and aviation, renewable energy transition plans and the challenges of achieving them in countries like China and India. There will be a discussion of strategies to ensure that major changes are inclusive and take into account the populations of historically marginalized countries, who feel some of the most intense effects of climate change.
An important stream running through all the discussions will be identifying what “net zero” is – and isn’t – when looking at corporate and country pledges. Switching from fossil fuels like coal and oil to renewables like solar and wind can reduce emissions and bring a company closer to the goals of removing an equal amount of emissions from the atmosphere as it enters it. .
But a transition to renewable energy is often only a small part of companies’ plans. Many rely on balancing their carbon footprint by investing in forest restoration or other projects. While this is better than nothing, experts note that relying on carbon offsets does not represent a change in business practices.
THE WAR IN UKRAINE AND THE FUTURE OF ENERGY
Russia’s war in Ukraine will feature prominently at the conference. When it comes to climate change, the conflict raises two central questions: How should countries respond to energy shocks by reducing or being cut off from Russian oil and gas? And will war accelerate the transition to renewables or help fossil fuel companies maintain the status quo?
Since the beginning of the war, there has been no shortage of business, environmentalists and political leaders trying to influence the answers to these questions, which will continue in Davos.
“Energy Security and the European Green Deal” is a panel where participants are expected to argue that the way forward is away from fossil fuels. But European countries, some of which are heavily dependent on Russia for energy, are also scrambling to find other sources of natural gas and oil to meet near-term needs.
While neither session explicitly argues for a doubling of fossil fuel dependence or expanding mining or exploration, if the past few months are any guide, those views are sure to be present. .
Peter Prengaman is the Associated Press’s global director of climate and environmental news. Follow him here: http://twitter.com/peterprengaman
The Associated Press’s climate and environmental coverage receives support from several private foundations. Learn more about AP’s climate initiative here. The AP is solely responsible for all content.