Only serious business action can keep 1.5C alive

"This is a moment in history where every firm needs to step up and lead," said CBI Director General Tony Danker, speaking at COP26’s largest business dinner.

With an audience of business leaders, ministers and foreign dignitaries - and alongside addresses from John Kerry, Jacinda Ardern, Rishi Sunak and Kwasi Kwarteng - Danker argued businesses were ready, willing and able to deliver a net zero world.

"This job is on us," he said.

Transcript

INTRODUCTION 

Good evening everybody, Secretary Kerry; Business Secretary Kwarteng; Secretaries of State also with us; Ministers from near and far; distinguished guests, leaders of business… 

Welcome to the CBI’s COP26 Dinner!  

And can I also say to those of you who are spending it with us – at least tonight – a very Happy Diwali. 

Now a special thanks to Weir again - alongside Vodafone and McKinsey Sustainability - for giving us our tea as they would say around here and, more importantly, for your leadership in the transition to a net zero world.  

It’s wonderful to be in Glasgow. I was told today that climate change had gotten so profound that even Glasgow had got warmer. That’s when you know things are really serious! 

But it’s also wonderful to be at a Glasgow COP where we are building momentum every day. 

But I will say one thing about Glasgow – this city where my grandparents were born – they don’t suffer fools gladly round here. They’ll have enjoyed the circus in town this week for sure, but they’ll be sceptical now, as to whether all of us – especially in this room – really mean business. 

IMPORTANCE OF COP26 

The world leaders have come and most have gone. They have forged more agreement. Our praise goes to them – many of you here – who have put humanity ahead of hubris. And planet ahead of politics.  

The targets are not yet bold enough. And some criticise political leaders. But not us. 

But I think business at this COP is in a very different place. Bold targets or timid ones. Total agreement or partial agreement. I don’t believe any of you in this room, any business that has come to Glasgow has come to ask questions of others. You haven’t come here because you think this is Government’s job. You’ve come because you think the job’s on us.  

And, I say tonight regardless of political progress, we in business are ready, willing and able to deliver a net zero world.  

Whatever its formal agreements, this COP will be best-known as the moment we reached a consensus: that Governments can’t get to Net Zero without business. And that businesses who fail to embrace Net Zero will get left behind. 

Our success, therefore, is interdependent at this COP. Where governments have made progress, great progress – such as deforestation or technological breakthroughs – companies will immediately change behaviour and investments will follow suit.  

Where governments have yet to agree, such as on carbon pricing, then the private sector cannot solve these shortcomings. Delivery will be fragmented and patchy.  

THE IMPERATIVE FOR BUSINESS TO LEAD: 

But above all, I believe this is a historic moment for business leadership. 

And I know from talking to many of you that for some of you it’s a moral responsibility, it’s a moral obligation.   

As Andrew Griffith put it to me, this is the second industrial revolution. The first one – was created here in the UK, and it was created by us in business – brought opportunities and growth that no one had expected or even dreamed of. Unfortunately, it also harmed our planet, in some ways irrevocably, along the way.   

But more prosaically, this is also a commercial imperative. Customers, clients, investors and shareholders expect change from us on this agenda and they expect it quickly. And let me suggest, supply chains will soon tolerate no weak links.   

So, as CFOs around the world run the numbers, they are realising that the business case has shifted. To put it bluntly, in pure commercial terms, the cost of inaction is for the first time higher than the cost of action. 

Every business has faced strategic challenges of this kind before. When the future attacks the present, the answer is never to believe you can protect the present. It is always to race to the future. And Net Zero is the future.  

Yet there is an emerging gap now between firms who want to be at the forefront of the transition and those who are resisting the inevitable. Well, it’s time for firms to choose – either lead the way or be left behind. 

Critics say that greenwashing by firms still continues. But I think that it’s now a minority sport. That’s clear from the new accountability regimes coming on stream, after this week. And you can see it in the record CEO attendance at COP. Let me tell you, companies don’t send their bosses to safeguard reputations. They send their bosses to make investments, take decisions and take action.  

The prizes of decarbonisation are already here. 

You can see it in the car companies with growing order books, for electric vehicles. Food companies with meat-free alternatives growing exponentially. Banks and advisory firms who see double digit growth in all things green. Energy companies whose decarbonisation strategies affect their higher market cap.  

But it’s also in the armies of SMEs who realise they need to get early mover advantage to be part of greener supply chains. Including family firms, many owners of whom I’ve spoken to recently who say they now see a future to their business beyond this generation. 

You know I think it's funny that the UN call this the race to zero. We call it the race to the top.  

THE CALL FOR GOVERNMENT ACTION  

And from the UK Prime Minister to the Prince of Wales, to Secretary Kerry, leaders everywhere are starting to say that it is the ingenuity and the financial might of the private sector that will get the world to Net Zero. To match their billions with our trillions.  

Well, we accept the challenge. We can, we must, and we will - make greater commitments, accept deeper accountability, and raise more capital for the task.  

But political leaders now need to get serious about what it will take to make this successful.  

Governments are used to being the green rule-makers. Now they must learn to become green market-makers.  

To stimulate market growth. To de-risk new technology investment. To re-balance regulation to support investment too. To use taxation to incentivise those who make green choices rather than those who don’t. 

This view we share with our government partners here in the UK, who are already adopting this approach.  

Billions don’t become trillions without work. And I think this will be a very new partnership between public and private. And governments can’t will the ends, but ignore the means.   

THE UK’S NET ZERO JOURNEY 

Finally, here in the UK, post-Brexit, post-Covid, decarbonisation is our big bet. It is bringing substance to the Prime Minister’s levelling up agenda – by bringing higher-value industries and jobs to different corners of our country. And it gives new definition to the idea of Global Britain – we can and we will export to the world our new green products and services. 

That is why we at the CBI have put decarbonisation at the heart of our economic vision for the UK. It’s why we are working tirelessly with government colleagues on how policy can unlock more green investment. 

And it is why we see it as our job to support you – every firm in this room – on your own journeys. The CBI will regard it as mission-critical to enable every firm in the UK to complete a successful net zero transition. 

CONCLUSION 

There is one final reason why we as business should lead the way on decarbonisation. Because we can.   

This packed room is a statement of intent.  

That whether for you it’s moral or commercial – obligation or opportunity – we as business stand ready to pick up the baton. 

So, thank you for your leadership. For the work you’ve done and the work you’re about to do.  

To make the hypothetical real. 

To make the target achievable. 

To say clearly tonight – that this job’s on us. 

And we are ready to seize the moment.  

Thank you very much.