THE WARREN REPORT “Policymakers and business
leaders need to collaborate to accelerate an energy transition that creates positive outcomes for people, society and the planet. The private sector can play a leading role in this transformation, which is why the IBC decided to focus on their businesses’ energy consumption with practical actions each organisation can take today both individually and through their value chains,” said Olivier Schwab, managing director of the World Economic Forum. Focus on energy demand came
after members of the IBC recognised the need for the private sector to play a leading role in driving demand-side energy transformation. Too much of the debate on the energy transition and climate had focused on the energy supply side. But demand-
Practical ways to get the Paris Agreement back on track
Andrew Warren looks at some of the proposals from the recent Davos Summit which could help to reduce energy demand while helping to drive growth and productivity.
A
suite of “doable today” business actions aimed at reducing the intensity of energy demand could unlock
annual savings of at least $2 trillion for the global economy if measures are taken by the end of this decade. This would boost growth, save companies cash and deliver competitive advantage while also reducing greenhouse gas emissions. These are the findings of the World
Economic Forum’s Transforming Energy Demand initiative, launched at the 2024 Davos Summit by over 120 global CEOs who are members of the International Business Council (IBC), a group representing 3% of global energy use. The new report comes as
energy demand is ramping up the international agenda. In one of the most widely supported initiatives at COP28, governments pledged to triple the world’s renewable energy capacity by 2030 but also to double the rate of energy efficiency improvement over the same period. Countries need to cut their energy intensity at least twice as fast between 2023 and 2030 as they did in previous years, which calls for substantial changes from the private sector.
Highlighted are practical actions 10
that businesses can take today to act on energy demand. These would be driven by energy-intensity reductions in buildings, industry and transport. Examples include energy-saving measures such as using artificial intelligence to optimise factory line design, value chain collaboration, industrial clustering to share clean energy initiatives, retrofitting the fabric of buildings with insulation and glazing improvements, plus the electrification of transport.
Concerted action Written by international consultancy PwC, the report says that “the potential of this demand-side action is extraordinary”. It offers a short- term, cost-efficient 31% reduction of demand, shared across all economic sectors. These gains are “deliverable now, at attractive returns, needing no new technology and could avoid the construction of 3,000 extra power stations”, according to estimates from the report. Such concerted action would unlock growth and productivity. At the same time, it would drive the required change in rate of doubling energy efficiency improvements set by countries at COP28, supporting the world to get back on track to meet the targets set by the Paris Agreement.
side actions are “doable today, at attractive returns with no need for new technology”, the report notes. Energy-intensity reduction
examples taken together represent a seriously under-addressed area. Awareness of its potential for business improvement and greenhouse gas reduction is low. Regulation and interventionist policies will be required to drive progress, coupled with public- awareness campaigns to highlight the importance of increasing energy efficiency. Almost half (47%) of IBC CEOs surveyed in the report agree there is a lack of supportive regulation for businesses to act on reducing energy demand, suggesting the need for private and public sectors to work together to drive change. “Reducing the amount of energy needed to manufacture products and deliver services is something we can act on now. Although progress is being made, there is a lot more to be done. The fact is that our energy demand continues to rise at unsustainable rates,” wrote Ana Botin in a special Financial Times article.
Deep collaboration Botin, group executive chair of Banco Santander and chair of the IBC, continued: “Businesses have a vital role to play. By using technology that is available and scalable today, we can reduce current energy intensity by up to a third, without decreasing output. It is crucial, therefore, that we work together with governments and regulators across both developed and developing markets to help accelerate progress on this issue.” PwC’s global chair Bob Moritz
Regulation and interventionist policies will be required to drive progress, coupled with public-awareness campaigns
agreed: “It is crucial we address energy demand alongside supply, reducing the energy intensity of current activity and increasing the energy efficiency of future growth. This will help the world to get back on track on targets set out in the Paris Agreement, support the COP28 pledge to double the rate of energy efficiency improvements by 2030, and support business growth. “Getting this right will take deep
collaboration across the public and private sectors. We need to raise awareness of the business case for change, align policy and private incentives, and develop new financial solutions to unlock action.” And so say all of us. ■
Andrew Warren
chairs the British Energy Efficiency Federation
EIBI | FEBRUARY 2024
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