At the UN General Assembly this week, US President Joe Biden announced that he was doubling the country’s commitment to overseas climate aid to more than $11bn annually by 2024.
This comes as an influential coalition of investors, representing $6.6trn in assets, is calling for a rapid scale-up of global investment into carbon removal solutions, to the extent that their capacity is more than ten times higher in 2050 than 2025.
The call to action is being made by the UN-convened Net-Zero Asset Owner Alliance, in a new position paper supported by NGOs WWF and Global Optimism. It warns that unless historic levels of under-investment in both nature-based solutions and man-made technologies is rectified now, they are unlikely to be available at the scale needed in the coming decades.
It recommends investment and action to the level that the global, verified capacity of carbon dioxide removal (CDR) removal solutions – both nature-based and man-made – reach 0.5 to 1.2 gigatonnes of CO2e each year by 2025. This capacity should then reach six to 10 gigatonnes by 2050.
In 2020, the Taskforce estimated that the current market for offsets will need to grow by at least 15-fold by 2030 if the private sector is to align with the Paris Agreement’s 1.5C trajectory. By 2050, it may need to be up to 160 times bigger than in 2020.
For context, global emissions in 2020 were 42 gigatonnes. At present, total carbon offsets sold per annum are not much over 100 million tonnes, about 0.2% of total global carbon emissions.
However, the carbon offset market value appears poised for rapid growth. The Institute of International Finance’s task force on scaling voluntary carbon markets predicts that the demand for carbon credits will increase by a factor of 15 or more by 2030, and by a factor of up to 100 by 2050. Also, it says, the carbon credit market could be worth more than $50 billion by 2030.
Carbon offset growth is underpinned by net zero pledges that are proliferating across the globe. For instance, Unilever has outlined plans to help suppliers representing two-thirds of its upstream emissions to decarbonise in line with climate science.
Included in the firm’s Climate Transition Action Plan, which received the backing of more than 99% of shareholders at a vote this May, was a commitment to help suppliers set approved science-based targets and to adopt the systems, processes and technologies needed to deliver them.
Unilever’s headline climate commitment is to become a net-zero business by 2039. There is an interim ambition to halve the impact of products, including their supply chain impacts, by 2030.
Building on these commitments, Unilever’s chief procurement officer David Ingram this week launched a new initiative called the Unilever Climate Promise for Suppliers.
In signing the Promise, suppliers commit to developing public targets to reduce emissions by at least 50% by 2030. A landmark report from the Intergovernmental Panel on Climate Change (IPCC) in 2018 stated that humanity will have the best chance of limiting the global temperature increase to 1.5% by halving global emissions by 2030 and bringing them to net-zero by 2050.
Promise signatories are also required to share their baseline greenhouse gas footprint data with Unilever, that the business will provide more targeted support, and to publicly report on decarbonisation progress.
Any supplier can sign the Promise at any time but, in the first instance, Unilever is hosting a programme that will more closely involve 40 suppliers from early 2022. From 2023 onwards, the programme will be scaled to reach 300 of the suppliers that contribute most significantly to Unilever’s upstream Scope 3 (indirect) emissions. Collectively, these 300 suppliers are accountable for two-thirds of the emissions in this scope.
Ingram said Unilever needs to “radically reduce our greenhouse gas impact at every step of production – from the raw materials we source, to manufacturing, right up to when our products are sold”.
Also announcing fresh measures to tackle emissions beyond its own operations this week is technology and consultancy giant Capgemini.
Building on a commitment to help clients mitigate 10 million tonnes of greenhouse gas emissions by 2030 – equivalent to 20 times its own direct emissions – the business has launched a new ‘Net Zero Strategy’ offering for clients.
The offering will support businesses with the target-setting part of net-zero, but also with supporting long-term visions with credible science-based ambitions, and with delivering tangible emissions reductions on the ground.
Capgemini said in a statement that the offering will “support clients on implementing transformative business models and engaging the right talent and stakeholders to achieve low carbon transformation”.