Global companies are combining their purchasing power to help commercialize low-carbon technologies as part of their efforts to meet their net zero commitments.
A die The largest corporate spending plan announced at the United Nations climate conference, known as COP27, was the First Movers Coalition. Its 65 member companies pledge to collectively purchase $12 billion in nascent low-carbon products and services by 2030 to help vendors grow their offerings and grow.
The money mobilized so far is well below what the private sector needs to put forward to help meet the Paris Agreement, but highlights how the business community is working together to fight global warming.
“It’s just amazing to me to see the continued diversification of efforts, the big companies making real and very important concrete commitments,” said Brad Smith, vice president and president of Microsoft. Corp.
In May, Microsoft joined the coalition and pledged to spend $200 million on long-term carbon elimination. “When we bring other people together, it shows there’s a real market and gives us an opportunity to start spinning the wheels,” Smith said.
The coalition targets the elimination of carbon dioxide as well as seven sectors that are difficult to decarbonise: aluminium, aeronautics, chemicals, concrete, shipping, steel and trucking, which together account for more than 30% of global greenhouse gas emissions. Members represent over $8 trillion in market capital and include Alphabet Inc.,
BHP Group Ltd., Ford Motor Co.
Novelis Inc., Trafigura and the Volvo Group.
“You talk to some of the vendors of this technology and it’s an age-old story, no one is there to buy,” said Nancy Gillis, program manager for the First Movers Coalition at the World Economic Forum. “These are innovative technologies…and if they were available by 2030, it could be a game-changer.”
To join the group, the CEO of a company sends a letter acknowledging that he may have to pay a premium for low-carbon technologies. “They understand that they’re accepting a certain percentage of an expense that’s fundamental to the business that they’re doing and they don’t know if it’s going to be there and they don’t know what they’re paying for it,” Ms. Gillis.
Once commitments are made, companies and suppliers meet regularly to share progress and work together. Buyer companies also meet quarterly with representatives of the World Economic Forum to monitor progress.
The First Movers Coalition has grown since it was launched by the World Economic Forum and the US government at last year’s climate summit in Glasgow. It currently has companies registered in six of the seven economically essential sectors it targets, with chemicals being the next area in which it will engage companies. But Ms Gillis said the group planned to add only enough influential companies to drive demand in target sectors.
This year, for example, the coalition added a program for green cement and concrete with General Motors Co.
and RMZ Corp. among companies that commit to purchasing 10% of near-zero-emissions cement and concrete per year by the end of the decade.
Recent examples of coalitions include Volvo building heavy-duty electric trucks with fossil-free steel. It will provide the first delivery of 20 trucks to another member of the Amazon.com coalition Inc.
by the end of the year.
Another example is the packaging and aerospace company Ball Corp.
He joined Rio Tinto ltd.
Novelis Inc. and Anheuser-Busch InBev HER
this year to launch a pilot aluminum can for Corona beer in Canada. The can is made with hydroelectricity, recycled materials and inert anode technology that releases oxygen instead of CO2.
The coalition helps Ball work with companies across the aluminum value chain, from suppliers to customers such as fellow members Novelis, Constellium SE and PepsiCo. Inc.
— to share data and decide where certain low-carbon methods can be accelerated, said Ball sustainability director Ramon Arratia.
“Microsoft did not join [the First Movers Coalition] in Glasgow last year. I think this was a mistake. As I tend to joke, we were among the second joiners of the first movers,” Mr. Smith said.
Write to Dieter Holger at firstname.lastname@example.org
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