Page 40 - WEF Reoprt 2020

agriculture system to practices such as organizations. Overall, lack of consistent
62
regenerative farming would require radical awareness-raising among business leaders
shifts in subsidies and investment. Similarly, may create first-mover advantages for some,
about 10% of global emissions comes but it also potentially demonstrates the
from the very high heat levels required to much more concerning overarching risk: that
produce commodities—such as cement, many businesses may not be planning for
steel and petrochemicals—and, although the physical and financial risks that climate
low-carbon alternatives do exist, they are change may have on their activities and
currently costly. New public-private initiatives across their value chains.
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such as the Mission Possible Platform,
launched at the UN Climate Action Summit in
September 2019, are designed to help heavy
industry sectors achieve net-zero emissions % increase in global
by mid-century through collaboration with 2.3 energy demand
governments, international organizations
and investors. in 2018

Although there are financing roadmaps for
green energy, there are serious financing
gaps for overall plans to mitigate and adapt Consequently, businesses may also struggle
to climate change. The UN estimates to anticipate future shifts in government
that, to meet 2030 goals for adaptation, policy and customer preferences in time
developing countries will need US$140 to to align their strategy—for example, the
US$300 billion annually—much higher than rapid rise in consumer demand for non-
currently available adaptation financing. plastic packaging took companies by
56
Moreover, investments in climate-related surprise. Increasing pressure to respond is
activities largely stay within wealthy nations’ generating transition risk at the individual
borders. Only 49 developing countries company level as each company needs to
57
have quantifiable climate-financing targets, reassess assets, reconcile trade-offs and
and few of them look further than 2020, develop new capabilities to move towards
rendering them largely irrelevant to climate a more sustainable model. At the same
risks beyond this horizon. 58 time, there is growing acknowledgement
among some critical financial-sector players
Aside from a number of vanguard first- that environmental risks could threaten the
mover champions, most companies, too, broader economic outlook, which could be a
appear ill-equipped to address climate risk. sign of more positive shifts moving forward. 63
Many do not yet quantify physical climate
risks in their direct operations and supply
chains, and those that do are likely to be A green social contract
underestimating them significantly. In the
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World Economic Forum’s survey of business Concern about climate change is increasing,
64
leaders, none of the top 10 risks globally are particularly among young people, and
environmental, suggesting a critical blind this could alter the paths societies take in
spot. On the other hand, those business confronting the challenge. Political winds are
60
leaders who are more exposed to climate shifting: in 2019 climate change underpinned
change discussions among their peers the Greens’ surge in the European
become more aware of climate risks and Parliament elections; it also emerged as
65
thus become more likely to act. For example, a key policy issue in the US Democratic
industry partners of the World Economic presidential primaries and in elections in
Forum ranked environmental risks higher Australia, Canada and Switzerland. Most
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than business leaders surveyed more recently, the European Commission, led by
broadly. This awareness and concern for President Ursula von der Leyen, announced
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environmental risks is also likely influenced a broad set of plans—the “European Green
by other business organizations that focus Deal”—that is intended to re-evaluate the
on helping their members tackle climate European economy in light of environmental
and other related issues, demonstrating risks. Climate activism also increased in
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the importance of these networks and 2019. The non-violent civil disobedience

The Global Risks Report 2020 35