Overcoming barriers through collaboration

To overcome business inertia, shape expectations about the future and create a commercially viable environment for transitioning towards net zero, a new level of collaboration between countries, business sectors and institutions is urgently needed. While collaboration efforts have increased in recent years, they have not yet been ambitious enough to enable the global community to reach the goals outlined in the Paris Agreement. 

The Paris Agreement is an important milestone in the international climate agenda and was reached through collaboration between hundreds of governments and businesses. However, to deliver on these promises, further collaborative action is required and individuals, governmental institutions and businesses within the public and private sectors all have an important role to play in making this happen. 

In the Rewiring the Economy report, CISL outlines a strategic vision for how business, government and finance can collaborate to drive the transition to a net zero economy. The report outlines 10 tasks (shown in Table 1) that leaders can collaboratively undertake with ambitions of creating a long-term sustainable economy, building a more resilient society and protecting the natural environment on which financial capital depends (CISL, 2015).

Table 1: Ten tasks for government, finance and business to collaborate on in building the net zero economy. (Source: CISL, 2015)

Government1. Measure the right things, set the right targets.
2. Align incentives to support better outcomes.
3. Drive socially useful innovation.
Finance4. Ensure capital acts for the long term.5. Price capital according to the true costs of business activities.
6. Innovate financial structures better to serve sustainable business.
Business7. Align organisational purpose, strategy and business models.
8. Set evidence-based targets, measure and be transparent.
9. Embed sustainability in practices and decisions.
10. Engage, collaborate and advocate change.

To visualise the relationships in this collaboration, it can be helpful to think of government as providing the direction for the economy, the finance sector as the fuel, and business as the vital engine that drives the economy forward.

In the context of climate action, the four strategic tasks for business (Tasks 7 to 10) can be used as a set of guiding principles for identifying the decarbonisation strategies required for achieving systemic change. For these to be implemented and embedded, active engagement and leadership from businesses is essential.