In collaboration with Boston Consulting Group The State of Climate Action: Major Course Correction Needed from +1.5% to −7% Annual Emissions WHITE PAPER NOVEMBER 2023 Images: Getty Images Contents Forewords 3 Executive summary 4 1. Without much more dramatic action, 1.5°C will slip out of reach 5 2. National commitments and policies are still widely insufficient 8 3. Corporate climate action is progressing far too slowly 10 4. Green technologies and infrastructure are not scaling fast enough 12 5. The climate funding gap remains enormous 14 6. Mitigation action needs to drastically step up 16 Conclusion 17 Contributors 18 Endnotes 19 Disclaimer This document is published by the World Economic Forum as a contribution to a project, insight area or interaction. The findings, interpretations and conclusions expressed herein are a result of a collaborative process facilitated and endorsed by the World Economic Forum but whose results do not necessarily represent the views of the World Economic Forum, nor the entirety of its Members, Partners or other stakeholders. © 2023 World Economic Forum. All rights reserved. No part of this publication may be reproduced or transmitted in any form or by any means, including photocopying and recording, or by any information storage and retrieval system. The State of Climate Action: Major Course Correction Needed from +1.5% to −7% Annual Emissions 2 November 2023 The State of Climate Action: Major Course Correction Needed from +1.5% to −7% Annual Emissions Forewords Pim Valdre Head of Climate Ambition Initiatives, World Economic Forum The picture that comes out of this white paper is in line with the findings described in the UN’s global stocktake report: we face a drastic gap in climate action, taking us further from the 1.5°C path by the day.1 This situation leaves us with no choice but to double down on mitigation, focusing on three imperatives for all actors. First, all countries and companies should shift immediately towards delivering shorter-term targets and actions and making their net-zero transition plans public. Second, climate actions, funding and global coalitions should rigorously prioritize solutions that promise immediate outsized impact, such as value-chain decarbonization partnerships, faster deployment of the most mature technologies – for example, solar photovoltaics (PV), wind and electric vehicles (EVs) – and related grid infrastructure and reductions in methane emissions. Finally, we must ensure a just transition, based on various levels of economic and social capabilities, adaptation challenges and responsibility, so that no one is left behind. Patrick Herhold Managing Director and Senior Partner, Center for Climate and Sustainability, Boston Consulting Group Without far more dramatic action, 1.5°C will slip out of reach and even “well under 2°C” will be at high risk. A 1.5°C path now calls for reductions in emissions of 7% every year until 2030; this is more than the impact from COVID-19 and against the current trend of a 1.5% annual increase. To avoid catastrophic impacts on livelihoods and economies, we need to drastically step up national commitments and policies, corporate climate action, green-technology scaling and funding. The State of Climate Action: Major Course Correction Needed from +1.5% to −7% Annual Emissions 3 Executive summary As 1.5°C is slipping out of reach, achieving it now calls for a 7% annual emissions reduction, more than the climate reduction impact from COVID-19 and against the current trend of a 1.5% annual increase. As the required path gets steeper, progress is still widely insufficient in all aspects: – Only 35% of emissions are covered by a national net-zero commitment by 2050, and only 7% by countries that complement bold targets with ambitious policies. – Fewer than 20% of the world’s top 1,000 companies have set 1.5°C science-based targets, and, based on the Net Zero Tracker, fewer than 10% also have comprehensive public transition plans.2 – Technologies that are economically attractive now or will be in the near future can only achieve just over half of the emissions reductions needed to reach 1.5°C. The rest are still in the early stages of development, requiring greater investment and policy support to become economically competitive. – More than half of climate funding needs are still unmet, with critical gaps in early technologies and infrastructure particularly acute