DAVOS, Switzerland — While the COVID-19 pandemic and Russia’s war in Ukraine will be the focus of the World Economic Forum’s business and government leaders’ meeting, so will climate change. It has captured the world’s attention in undeniable and devastating ways.
The acceleration of rising temperatures, the brutality and cost of major weather events, and their impact, particularly on people in developing countries, have moved the issue from a scientific matter to one that touches every aspect of life, including (or perhaps especially) business and economy.
A third of the roughly 270 panels Monday through Thursday will focus on climate change or its direct effects. US climate envoy John Kerry, Ugandan climate activist Vanessa Nakate and Alok Sharma, chair of last year’s COP26 international climate conference, are among the climate leaders expected in the Swiss resort of Davos.
At the forum’s first in-person meeting in two years, the climate panels are as varied as the issue. They range from combating “eco-fear” to helping debt-ridden countries finance a sustainable transition. Here’s a look at some broader themes that are likely to emerge:
ENVIRONMENTAL, SOCIAL, AND GOVERNANCE
Several panels will struggle with an approach to investing that considers the environment and other important factors. The acronym ESG 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 provide the basis for evaluating a company’s emissions, environmental impact, and financial risks related to climate change.
They are also controversial and raise questions: should certain statements be made mandatory? Should they be standardized and regulated, and by whom? Or has the ESG movement already gone too far, ultimately hindering investment and doing little to curb greenhouse gas emissions?
Views sometimes fall along political lines. In the US, many Republicans call them “awake,” while many on the left, especially environmentalists and campaigners, argue that increased reporting and transparency can lead to real change.
Many managers of some of the world’s largest mutual funds have argued that ESG is essential to evaluating risk. Last week, Tesla CEO Elon Musk said the approach was “armed by fake social justice fighters.”
ENERGY TRANSITION AND ‘NET ZERO’
The world’s top climate scientists have warned that significant reductions in greenhouse gas emissions this decade are necessary to minimize warming and prevent the most devastating impacts on the planet. That requires major changes in how business is done, from how products are produced to how they are transported.
Several panels will look at areas where companies have successfully transitioned much of their energy portfolio to renewables, the role of finance and government in driving or forcing change, and strategies for holding companies accountable. Despite heightened awareness and commitments from companies, emissions are rising worldwide.
“Shifting climate debate from ambition to delivery” is a panel title that summarizes the enormous challenge.
Sessions will look at sectors such as decarbonization of shipping and aviation, sustainable transition plans, and the challenges of achieving them in countries such as China and India. Strategies will be discussed to ensure major shifts are inclusive and take into account people in historically marginalized countries who are feeling some of the most intense effects of climate change.
A key flow of all the discussion is identifying what is – and isn’t – “net zero” when looking at corporate and country commitments. Switching from fossil fuels such as coal and oil to renewable energy sources such as solar and wind can reduce emissions and move a company closer to its targets of removing an equal amount of emissions from the atmosphere as they enter.
But a transition to renewable energy is often only a small part of business plans. Many rely on balancing their carbon footprint by investing in forest restoration or other projects. While it’s better than nothing, experts note that depending on carbon offsets doesn’t change business practices.
WAR IN UKRAINE AND THE FUTURE OF ENERGY
Russia’s war in Ukraine will loom large at the conference. The conflict raises two central questions regarding climate change: How should countries respond to energy shocks from cutting or cutting off Russian oil and gas? And will the war accelerate the transition to renewable energy or help fossil fuel companies maintain the status quo?
Since the beginning of the war, there has been no shortage of companies, environmentalists, and political leaders trying to influence the answers to those questions, which will be transferred to 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 rely heavily on Russia for energy, are also trying to find other sources of natural gas and oil to meet short-term needs.
While no session explicitly advocates doubling fossil fuel dependency or expanding extraction or exploration, those views will certainly be there if the last few months are any guide.
Peter Prengaman is the Associated Press’s global climate and environmental news director. Follow him here: http://twitter.com/peterprengaman.
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