CEOS face challenge over sluggish climate efforts

A return to Davos by corporate titans and their bankers after recent record Alpine temperatures has turned a spotlight on just how quickly they are moving to rein in carbon emissions.

The number of organisations pledging to get to net-zero emissions by mid-century has soared in recent years, up 60 per cent to more than 11,000 in September 2022, UN figures showed.

Yet the world remains on course to miss its climate goals.

Several bankers and executives at this year’s World Economic Forum (WEF) annual meeting in the Swiss ski resort of Davos said they were looking for ways to speed up the transition to a greener future.

Increasingly, they said conversations in C-suites and with financiers had turned to the risks that climate change presented to businesses.

“Suddenly people have realised that it is something that’s not just a way of presenting things, but that it is a necessity for survival,” said André Hoffmann, vice-chairman of Swiss drugmaker Roche.

While there is agreement on the need for change, people were divided on the pace. Climate activist Greta Thunberg made the journey up the Swiss Alps to call on the global energy industry and its financiers to end all fossil fuel investments.

Privately, bankers said the energy crisis in Ukraine had shown that they needed to fund a transition to renewable energy, which would take time. Despite scientists warning last year that time was running out for humanity to cap global warming and limit devastating weather events, 2022 was dominated by Russia’s war of Ukraine and an economy-damaging spike in inflation.

Executives from some of the leading US financial firms also faced growing pressure from domestic right-wing politicians to row back on efforts to reflect environmental issues in their investment decision-making.

Yet with regulators across the world bringing in tougher rules to better police ‘sustainable’ activities — and with more bad practice being challenged in court — executives in the Swiss mountain resort said they were focused on sustainability.

Suni Harford, the president of UBS’S asset management arm who leads the bank’s sustainability efforts, said her conversations at Davos suggested no let up in focus on climate, despite the shorterterm pressures.

“Clients are becoming ever more informed on the energy transition, demand for sustainable and green products has held up well, and clients are increasingly looking to measure the impact of their portfolios.”