‘Aligning entire sectors of the economy with climate goals is a complex process’
Viewpoints: During the critical drive toward net zero emissions, collaboration with diverse stakeholders is essential for scaling innovation and deploying clean energy solutions at scale, writes Jules Kortenhorst, CEO of RMI.
Our monthly Viewpoints series invites guest authors from outside of Wells Fargo to share an important perspective related to their work. Today, we welcome Jules Kortenhorst, CEO of RMI.
Earth Day is an opportunity to reflect on our commitments to our planet, and to each other. And that has never been more true than now, as we enter the decisive decade for the climate crisis. Scientists warned that even if we reach net zero emissions by 2050, we still must cut emissions in half this decade to keep global temperature rise below 1.5 degrees Celsius and avoid the worst effects of climate change.
This means we must be more committed than ever to securing a livable future. At RMI, we have been working for nearly 40 years to secure a clean, prosperous, zero-carbon future for all. Now, facing the urgency of the climate crisis, we are doubling down and realigning all of our programs to the 1.5-degree target. This includes our work in key economic sectors such as electricity, mobility, buildings, and industry, and in critical geographies around the world including the United States, China, India, and emerging economies.
Achieving these emission reductions across sectors and geographies will require us to leverage many forces. Along with policy at all levels, we must use market catalysts such as data, technology, finance, and education. Combined with the continuously falling costs of technologies including solar, wind, and batteries, momentum is building toward a transformation of the global economy that will bring enormous benefits to people everywhere.
These benefits go beyond avoiding runaway climate change. This transformation can bring improved health outcomes; better jobs; stronger community resilience; cleaner air, land, and water; and more. And while the costs of failing to achieve the clean energy transition are immense, the advantages of taking immediate action are clear. Indeed, many nations, companies, and other leaders around the world are now starting to better understand this calculus and are leveraging COVID recovery efforts to catapult their economies into the clean energy future.
The United States rejoining the Paris Agreement is an important step in this growing momentum. At the upcoming Climate Change Conference in Glasgow, all nations must come to the table to raise ambition and reduce emissions. But this will also require all sectors of the economy to make similar commitments and take immediate action on the pathway to net zero for their industry. It is essential that they be elevated to the same level of importance as nations when it comes to climate commitments.
Innovating toward net zero
Aligning entire sectors of the economy with climate goals is a complex process. Not only do we need companies in each industry to lead the way, we also need other stakeholders such as financial organizations and customers to agree on the pathway. When the companies leading emission reductions are rewarded with better financial terms and higher customer demand, this accelerates the process for the entire sector, as the rest of the industry is forced to rapidly follow or risk obsolescence. Our new Center for Climate Aligned Finance is focused on accelerating this process, and includes large banks such as Bank of America, Goldman Sachs, JP Morgan, and Wells Fargo.
For large global industries such as aviation, shipping, and steel, the process to emissions reduction is even more complex, as policies around the world must also align to avoid creating regional economic disadvantages. For this reason, elevating these complex, hard-to-abate global industries to the same level of attention as nations at the Climate Change Conference is particularly important. We are working toward this goal with the Mission Possible Partnership, which brings together seven sectors that are the most difficult to decarbonize, and are responsible for 30% of global emissions, to drive them toward net zero.
“We are thankful for the support that allows us to continue this essential work and look forward to continued acceleration of progress during this most critical time.” — Jules Kortenhorst, CEO of RMI
A critical element of success for the Mission Possible Partnership is more innovation to these industries. One platform RMI is using to do this is Third Derivative, a fully integrated innovation ecosystem that brings together leading clean energy startups with an accelerator program, investors, and corporate partners like Wells Fargo. This consortium of corporate partners is an important key to success for clean energy startups, as they look to scale innovation across complex value chains, markets, and industries.
Collaboration with diverse stakeholders, including corporate partners, financial organizations, and policymakers, is essential for scaling innovation and deploying clean energy solutions at scale around the world. RMI is demonstrating how this type of collaboration and systems-level thinking can drive rapid progress toward decarbonization across critical industries and geographies. We are thankful for the support that allows us to continue this essential work and look forward to continued acceleration of progress during this most critical time.