Amsterdam, 26 June 2024 – Set against the picturesque backdrop of Borgo Egnazia, Italy, the latest G7 summit was a stage for delicate decisions. In the final communiqué released on 14 June, the G7 leaders reaffirmed their commitment to tackling the triple crisis of climate change, biodiversity loss and pollution. Acknowledging these aspects as inherently connected is vital, as is pushing for a ‘just transition’.
As the ILO puts it, a just transition is about “Greening the economy in a way that is as fair and inclusive as possible to everyone concerned, creating decent work opportunities and leaving no one behind”. It’s significant therefore that the G7 has recognized the role of vulnerable communities, diverse social challenges and need for wide involvement of businesses and civil society.
We might be tempted to salute these commitments with nothing but enthusiasm, but unfortunately not all that glitters is gold. Despite the positive overtones, the summit lacked the ambition to propose any new – and much-needed – actions against climate change.
Yet how can the corporate world contribute where international policy setters fall short? Here, we can draw inspiration from the G7 communiqué: “Availability, comparability, and credibility of robust information in the financial sector and real economy”, which underscores the importance of effective sustainability reporting practices by the private sector.
Away from fossil fuels, but not just yet
Let’s start with the silver linings. The G7 leaders have pledged to achieve a substantial reduction in global greenhouse gas (GHG) emissions, aiming for a 43% fall by the end of this decade and a 60% reduction by 2035 from 2019 levels. This is welcome, as emissions continue to rise, posing challenges to achieving the goal of limiting global temperature rise to below 1.5°C.
Cutting emissions goes hand-in hand with another important goal, to triple global renewable capacity and double energy efficiency by 2030. Accelerating renewables is essential for transitioning away from fossil fuels, enhancing energy security, boosting growth and job creation. Improving the resilience and flexibility of electricity systems is another key issue and can be attained through increase deployment of storage systems, digitization of grids and power plants, and investing in the dedicated supply chains.
Although it’s an encouraging starting point, it is simply not enough. The G7 countries must rule out an urgent plan to phase out fossil fuel with a clear and ambitious timeline, ideally within the next decade. Only then, they can genuinely lead the way in climate action which, as the G7 highlighted, must put people at its core, and it needs a tangible contribution from the society and business actors alike.
Pollution’s toll on biodiversity
The G7 acknowledges pollution as a key driver of biodiversity loss. For instance, nitrogen deposition remains a significant threat, with damaging levels found in 75% of the total ecosystem of the 27 EU Member States in 2020. The final declaration remarks once again how concentrations of pollutants negatively affect ecosystem and species health. Our planet’s biodiversity, once robust and diverse, it is now struggling to adapt to the rapidly changing climate.
This situation is not merely an environmental concern; it’s a pressing and holistic crisis, with harsh consequences on our food security and supply chains. As the communiqué states:
“We recall our existing commitments…in halting and reversing biodiversity loss by 2030, in an integrated manner, while ensuring sustainable and inclusive economic growth and development, enhancing the resilience of our economies and accelerating energy transition”.
According to the European Environmental Agency, ground-level ozone continues to damage crops and reduce yields. From 2000 to 2020, there was a notable reduction in the proportion of agricultural land exposed to harmful ozone levels, falling to a low of 6% in 2020. However, the economic losses on wheat yields in 2019 still totalled €1.4 billion across 35 European countries.
What all of this points towards is a complex web of interconnected challenges.
Promises and pitfalls
Ambitious pledges require rock-solid foundations, yet the G7 communiqué falls short by lacking a bold and clear timeline, with defined milestones. The summit should serve as the cornerstone for climate commitments, leveraging its influential position to set agendas and mobilize essential finances and resources. What we perceive, however, is a gap between the urgency of the situation and the incremental steps being taken to address it.
First and foremost, the focus must extend beyond a vague reference to “transitioning away” from fossil fuels. The world is waiting for ambitious commitments based on a direct transition to renewable energy systems, with people to be put at its very cor. Yet, there are no clear steps and timeframe to phase out from fossil fuel.
The aim to phase out unabated coal by the early 2030s is equally underwhelming: there is a deliberate vagueness around the target date while urgent action is required now.
Moreover, the G7 leaders gathered in Apulia missed the chance to set ambitious targets on the new collective quantified goal on climate finance. In the final communiqué, the G7 delegates this crucial task to the upcoming COP29, that will take place this fall in Baku.
The seriousness of the situation is echoed in the word of UN Secretary General, Antonio Guterres: “Unless we act now, the 2030 Agenda will become an epitaph for a world that might have been”.
It’s time for boldness and accountability
Forward-looking metrics are needed to outline credible transition pathways, both for the public and private sectors. This not just a key part of the G7 stance, but also a milestone of GRI’s mission. The triple crisis of climate change, biodiversity loss and pollution are reflected in the GRI Standards:
- GRI 101: Biodiversity 2024. Launched in January 2024, it emphasizes the synergies and trade-offs between biodiversity and climate, urging companies to consider and disclose these in their reports. It also aligns with the G7’s objectives, helping organizations disclose significant impacts on their biodiversity impacts.
- GRI Climate Change Standard. Currently incorporating public feedback before publication early next year, it prioritizes GHG reductions as the primary mitigation action expected for companies, while linking them with impacts on society and the people, and includes multiple disclosures that are directly linked to biodiversity. It also covers the use of carbon credits, as well as transition and adaptation plans.
- A new revision of GRI Energy Standards will kick off soon, and focus on transparency in energy efficiency, renewable transitions and their social and environmental impacts, incorporating the broad concept of just transition.
In the grand tapestry of climate action, we must ensure commitments do not become relics of promises unfulfilled. A holistic approach towards climate change is surely the way to go, but it must feature true boldness and effective corporate accountability. In an era where the stakes are so high, we cannot afford anything less.
Margherita Barbieri is a manager in the GRI Topic Standards Team, where she is leading the project to update of the GRI Climate Change & Energy Standards. Before joining GRI, Margherita worked in the food and beverage industry, specializing in marketing and sustainability. She also led the World Economic Forum circular economy initiative, Scale 360°, in Turin. She completed the Executive Programmes in Corporate Sustainability and Leadership from Saïd Business School (UK) and holds an MA in International Relations from the University of Turin (Italy).
ABOUT GRI
Established in 1997, Global Reporting Initiative (GRI) is the independent, international organization that helping businesses and other organizations take responsibility for their impacts by providing the global common language to report those impacts.
The GRI Standards, the leading global standards for sustainability reporting, are provided as a free public good. They are used each year by more than 11,000 organizations in over 100 countries, including 78% of the world’s largest 250 companies. The GRI Standards were downloaded by users around one million times in 2022, a 45% increase on the previous year.
