In a world grappling with the urgency of climate change, businesses, especially small and medium-sized enterprises (SMEs), are increasingly focused on transitioning towards zero carbon emissions. Governments play a crucial role in aligning their policies and strategies with this transition – but public-private alignment is always challenging.
Initiatives such as the First Movers Coalition (FMC) from the World Economic Forum (WEF) aim to move things in the right direction. The FMC coordinates a coalition of 12 governments to promote the adoption of low-carbon technologies on a larger scale. Launched at COP26 in Glasgow in 2021, by the following year’s conference 65 companies had become members, representing $12 billion in purchase commitments for green technologies.
Nathan Cooper, climate strategy advisor at the World Economic Forum, played an important role in much of FMC’s development. “Its main goal is to explore how we can harness the demand power of global companies to accelerate the adoption of low-carbon technologies,” Cooper tells Sustainable Future News. “We want to encourage companies to make commitments to achieve net zero emissions and support them in implementing those commitments in the real economy. The coalition focuses on the transition to a net zero economy by 2050 and the decarbonisation of the global economy by 45% by 2030.”
Cooper’s relationship with COP is long-standing – across multiple roles. Alongside the FMC, Cooper oversees the World Economic Forum’s involvement in intergovernmental processes such as the UNFCCC COPs, G7, and G20, ensuring a coordinated and effective approach. Prior to his current role, Cooper held various positions in the UK Government, including important roles at the Department of Business, Energy, and Industrial Strategy (BEIS) and the UK Cabinet Office, notably leading the development of business and industrial strategies for the G7 and COP26.
There is often a disconnect between what negotiators discuss in international forums and the solutions that companies come up with.
Cooper emphasises the importance of governments setting bold and clear policies to support businesses in their transition towards sustainability, “While there has been a groundswell of companies setting net zero commitments, the challenge lies in translating those commitments into tangible actions in the real economy,” he says. “There is often a disconnect between what negotiators discuss in international forums and the solutions that companies come up with.
“By leveraging incentives such as subsidies and tax benefits, governments can provide an enabling environment for businesses to allocate capital and innovate.”
Cooper adds that clear policies help to ‘facilitate collaboration among various stakeholders, including suppliers, buyers, and demand-side actors’ to ensure the successful implementation of low-carbon technologies.
The role of the private sector
While governments create the framework, the private sector’s involvement is essential for driving the transition. Many companies have made net zero commitments, but turning these commitments into tangible action requires capital allocation and innovation. The private sector, especially industries with high emissions like heavy industry, needs to develop low-carbon alternatives that are economically viable.
Cooper believes that in order to hold these companies accountable, mandates and regulations “can help ensure that companies across sectors align with sustainability goals …consumers are increasingly seeking out companies with strong sustainability and climate leadership, and this trend incentivises businesses to adopt more sustainable practices.”
It is crucial for the UK to position itself as a leader in the green economy.
The shift towards a zero-carbon economy also presents significant opportunities for job creation. Globally, estimates suggest that following a net zero pathway could generate 14 million additional green jobs. In the UK alone, there is untapped potential for businesses to capitalise on green initiatives and position themselves as leaders in sustainability.
“It is crucial for the UK to position itself as a leader in the green economy,” says Cooper. “This requires collaboration between governments and businesses to unlock the full potential of job creation in sectors such as renewable energy, clean transportation, and sustainable industries.”
Cooper also acknowledges the importance of ensuring that climate strategies are equitable and inclusive. While reducing emissions remains a priority, governments and businesses should also focus on adaptation measures, particularly for vulnerable communities. “Businesses can contribute by assisting communities in building resilience to climate change through initiatives like early warning systems. Such investments not only protect communities but also offer substantial returns in terms of cost savings and avoided damages.”
Moving beyond greenwashing
Greenwashing has become a well-known issue. The European Supervisory Authorities – three regulatory agencies set up to develop financial services regulation across the EU – recently defined it as ‘a practice where sustainability-related statements, declarations, actions, or communications do not clearly and fairly reflect the underlying sustainability profile of an entity, a financial product, or financial services.’ Such a practice, the definition adds, ‘may be misleading to consumers, investors, or other market participants.’
For Cooper, voluntary commitments alone ‘are not enough’. “Governments need to mandate operationalising net zero commitments,” he explains. One example Cooper cites is the Task Force on Climate-Related Financial Disclosures (TCFD), which offers a carrot in the form of a framework to help companies but a stick in terms of mandatory disclosures for the UK’s largest companies. “Strong accountability measures, like those implemented by climate-focused NGOs [non-governmental organisations], are vital for monitoring progress and ensuring transparency,” adds Cooper.
“As the world strives for a sustainable future, the collaboration between governments and businesses is crucial,” concludes Cooper. “Governments must provide the necessary support and create enabling policies for businesses to transition towards a zero-carbon economy. The private sector, in turn, must drive innovation and allocate capital to develop affordable low-carbon alternatives.
Together, governments and businesses can pave the way for a more equitable and sustainable future.
“By embracing sustainability, businesses can not only contribute to mitigating climate change but also unlock job opportunities and foster economic growth,” Cooper adds. “Together, governments and businesses can pave the way for a more equitable and sustainable future.”
