Phase out fossil fuels by 2040, business giants urge world leaders

In an open letter published today (23 October), the businesses, representing almost $1trn in global annual revenue, state that their value chains are already “feeling the impacts and cost of increasing extreme weather events resulting from climate change” and single out fossil fuels as “the primary cause”.

The letter is coordinated by the We Mean Business Coalition. It states that although many large businesses have strong energy transition ambitions, they “cannot make this transition securely or efficiently alone”.

The signatories of the letter are calling on world leaders to set clear targets and timelines for phasing out all unabated fossil fuels.

They also note the importance of carbon pricing in driving this transition, plus maintaining energy security by rapidly scaling clean energy as a replacement.

On this latter point, the letter reiterates the International Energy Agency’s (IEA) recommendation for all wealthy nations to reach 100% decarbonised power systems by 2035 and all other nations to make this transition by 2040.

The letter emphasises how crucial it is for wealthy nations in the Global North to support nations in the Global South to diversify their energy systems and improve energy access. Otherwise, they will develop in line with pathways not aligned to the Paris Agreement.

IEA data shows that $150bn was invested in clean energy in developing economies last year. The Agency believes this amount must hit $1trn by 2030 to deliver a net-zero global economy by mid-century.

We Mean Business Coalition chief executive Maria Mendiluce said: “More than 80 countries rallied behind a call to phase out all fossil fuels at COP27, but action is not happening fast enough. The climate and economic warnings are clear. We need immediate, decisive action on a just and equitable transition from fossil fuels to a clean energy system.”

Signatories of the letter include AstraZeneca, Capgemini, Currys, Danone, Decathlon, Diageo, eBay, Electrolux, Heineken, Ikea, Interface, JLL, Mahindra Group, Natura & Co, Nestle, Unilever, Velux, Vodafone and Volvo Cars.

Also supporting the letter are BSR, CDP, Ceres, Climate Group, CLG Europe, The B Team, WBCSD, CLG UK, Cambridge Institute for Sustainability Leadership (CISL), WWF, Exponential Roadmap Initiative, Global Renewables Alliance and UNICEF.

Fossil to Clean

Getting nations to agree to a total fossil fuel phase out has proven challenging this year, with minds on energy security and economic development amid the economic downturn and the Russa-Ukraine conflict.

The G20 summit in India this September concluded with world leaders rallying behind an IEA recommendation for a trebling of global renewable generation capacity this decade, but failing to make and new commitments on fossil fuels.

The final G20 outcome documents for 2023 state that members should “phase down” unabated coal power “in line with national circumstances and recognising the need for support towards just transitions”. Oil and gas are not mentioned directly.

Shortly after the G20 summit concluded, the We Mean Business Coalition launched a new ‘Fossil-to-Clean’ campaign, under which businesses are united to campaign for a strong agreement on eliminating fossil fuels at COP28.

The UN climate summit begins in late November in Dubai. There are concerns that it will be challenging to secure such an agreement in a COP hosted by a fossil fuel exporting nation.

Maria Mendiluce recently penned an exclusive op-ed for edie in the lead-up to COP28. You can read that article in full here.