Global business leaders urge huge cuts in emissions

Tokyo, Japan, 20 June 2008 - Detailed climate change recommendations to the Group of Eight leaders, backed by an influential group of CEOs from many of the world’s largest companies, were delivered today to Prime Minister Yasuo Fukuda of Japan, who will host the G8’s annual summit next month in Hokkaido, Japan. The document outlines a new, more “environmentally effective and economically efficient” long-term policy framework to succeed the Kyoto Accord. It was presented on behalf of the group of 100 chairmen and CEOs by World Economic Forum Executive Chairman and Founder Klaus Schwab.

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In their recommendations, the CEOs urge adoption of a rapid and fundamental strategy by governments to bring about a low-carbon world economy. They call on the G8 and other developed country governments to provide leadership through deep absolute cuts in their greenhouse gas emissions (GHG), as well as direct work with the international business community to develop a pragmatic strategy of cost-effective, medium-term carbon abatement opportunities.

Facilitated by the World Economic Forum and the World Business Council for Sustainable Development, the new policy framework recommended by the CEOs represents a significant departure from the structure of the 1997 Kyoto Accord – more flexible and more results-oriented.

The business leaders suggest a combination of top-down international commitments by governments, particularly by developed economies but also including emerging economies, and practical bottom-up efforts within and across industry sectors in the form of a multifaceted agenda of intensified public-private cooperation. These efforts will be aimed at speeding the development and diffusion of low-carbon technologies, mobilizing financial support to help developing countries adopt such technologies, spurring changes in consumer purchasing behaviour, and establishing common metrics to create a positive dynamic of improved corporate benchmarking, disclosure and investment decision-making with respect to GHG mitigation.

At the same time, business leaders urge adoption of both a long-term goal, such as the aspiration to at least halve global GHG emissions by 2050, and a series of clear intermediate targets to be achieved in the most cost-effective manner possible through the use of market mechanisms that create clear economic value from emission reductions, including a deep and liquid international market for carbon.

World Economic Forum Founder and Executive Chairman Klaus Schwab said: “The business community has a crucial contribution to make to the design of a more effective global strategy to combat global warming, and these business leaders are sending a clear message to governments that they are willing and able to engage with ideas and other support if invited to do so. Having reached consensus among leading firms from virtually every industry and region, they have given us a concrete vision of how the international community could construct a plan that is both environmentally and economically sound. I congratulate them for the pragmatic, can-do spirit with which they approached this initiative, which ought to be a source of inspiration for everyone, not least the G8 leaders who will meet in two weeks.”

In a hopeful sign for the United Nations negotiating process that is due to culminate in December 2009 in Copenhagen, Denmark, CEOs of major companies endorsed the consensus recommendations in a wide range of developed and developing countries, including Australia, Brazil, Canada, India, Japan, Malaysia, Mexico, the Middle East, Russia and South Africa, as well as from Europe and the US. The group includes at least one CEO of a major company from each of the G8 and +5 economies, encompassing virtually every industry sector, such as energy, utilities, aviation, automotive, mining and metals, logistics, information and telecommunications, and financial services.

A multi-industry, cross-regional steering committee, including Alcoa, Applied Materials, AIG, Basic Elements, British Airways, Deutsche Bank, Duke Energy, EDF, Eskom, Petrobras, RusHydro, Shell, Telstra, Tepco, TNT and Vattenfall, led the development of the recommendations over the past 16 months.

The Pew Center for Global Climate Change served as a resource partner in the process to develop the recommendations, which involved over 500 participants in discussions in 11 meetings on five continents as part of the business contribution to the G8’s Gleneagles Dialogue on Climate Change, Clean Energy and Sustainable Development. Involving 20 of the world’s leading energy producing and consuming nations, the Gleneagles Dialogue was created as part of the outcome of the G8’s 2005 summit hosted by then United Kingdom Prime Minister Tony Blair in Gleneagles, Scotland.