For businesses to reach their emissions targets, the global trading system needs to adapt and businesses are calling for that change, the World Economic Forum (WEF) states in its 'Delivering a Climate Trade Agenda' industry insights report.
Action on trade is necessary for businesses to unlock net-zero targets. The study also finds that businesses are actively pursuing or ready to accelerate emissions reduction programmes, and trade policy action can accelerate that shift.
“Traditionally, trade and climate policy-making has happened in separate silos. The urgency of the climate crisis calls for us to break down these silos through public-private cooperation in order to accelerate emissions reductions while achieving prosperity for all. The good news for policy makers is businesses are ready and willing to support this change,” says WEF International Trade and Investment head Sean Doherty.
Solutions that are needed to mobilise trade policy to support climate action include reducing tariffs on climate-friendly goods, unlocking access to technology and aligning on carbon-based trade policies, the organisation says in a statement on September 20.
“International trade will play a key role in achieving a just transition to a low-carbon sustainable global economy. Businesses stand ready to lead in this transition, but governments can support by ensuring the right legislative and regulatory structures are in place,” notes international law firm and report collaborator Clifford Chance partner Jessica Gladstone.
The report explores global and domestic policy actions that can create climate-friendly trade that is fair, transparent and has technology and innovation at its core, she says.
The report includes a jointly-authored foreword by World Trade Organization director-general Ngozi Okonjo-Iweala and United Nations Framework Convention on Climate Change executive secretary Patricia Espinosa welcoming the insights from business.
Major intergovernmental meetings will be held by both organisations in the last quarter of this year, the WEF adds.
“Business can take steps to encourage alignment of trade rules with climate action. The WEF on September 20 launched a two-year work programme Climate Trade Zero to support public and private exchange on these issues as part of building a more sustainable trading system.”
Further, many companies also recognised that the transition is taking place at different speeds and levels of intensity across countries and sectors. Interviewees highlighted the importance of providing support and incentives to developing countries, and to supply-chain partners in developing countries, to undertake the investments necessary to reduce their emissions, the WEF says.
Meanwhile, the WEF is hosting a Sustainable Development Impact Summit from September 20 to September 23. The meeting brings together global leaders from business, government, and civil society under the theme Shaping an Equitable, Inclusive and Sustainable Recovery.
It is focusing on new technologies, policies and partnerships to advance cooperation, accelerate progress and highlight tangible solutions to global challenges.