Climate goals vs industry alliances

In a global economy, emissions don’t stop at borders – they move with the goods we trade. Almost every major economy is both an exporter and an importer of emissions. Around a quarter of global emissions are embedded in traded goods, and the G20 accounts for over 80% of these flows. This week at COP30 Brazil, the Climate Club released "Industry on the Road to 2050". My contribution with my colleagues Richard Baron, Samuel Leré and Matthew L. focuses on these “embedded emissions” – one of the largest blind spots in global climate governance. If we want to cut global emissions effectively, we need ways to reflect the carbon that moves through global value chains. It is also a politically sensitive area: decisions on accounting and responsibility can trigger concern about competitiveness or fairness. All the more reason to avoid fragmented responses and work towards cooperative approaches. Our paper highlights a political entry point: a cooperative system – bilateral or plurilateral – grounded in common data and shared monitoring, made possible by technical alignment. Some data already exists, but more work is needed to refine it. The European Climate Foundation will play its part by publishing a tracker at the end of 2026. But measurement alone will not deliver change. We also need practical cooperation and political will. This could help major economies – including the EU, China, India and Brazil – work together on standards for near-zero industrial materials, and align public procurement and industrial policies so they reward cleaner production rather than penalise development. The details are complex. What looks like slow progress from the outside often reflects difficult work on definitions, baselines and compatibility. Yet a larger picture is emerging: cooperation on embedded emissions can bridge industrial competitiveness, climate ambition and a fairer trading system. In practical terms, our paper outlines several steps: – harmonising core accounting principles so that data can be trusted and compared; – a voluntary coalition of countries must regularly publish their imported emissions and set reduction targets – developing shared benchmarks for low-emissions materials; – using public and private procurement to create real markets for clean industrial products; – ensuring emerging economies have the support needed to participate fully. You can read the full report here: https://lnkd.in/ecyjxdh9 Many thanks to the Climate Club team for their leadership, and to all those building the spaces where this cooperation can take shape. On the road to Belém and beyond, trade policy must now become core to the decarbonisation effort – and support the essential task of phasing out fossil fuels.

My latest short piece, “𝗟𝗼𝘀𝗶𝗻𝗴 𝘁𝗵𝗲 𝗚𝗿𝗲𝗲𝗻 𝗘𝗱𝗴𝗲: 𝗜𝗻𝗱𝘂𝘀𝘁𝗿𝗶𝗮𝗹 𝗣𝗼𝗹𝗶𝗰𝘆 𝗦𝗵𝗶𝗳𝘁𝘀 𝗔𝗺𝗶𝗱 𝗚𝗲𝗼𝗽𝗼𝗹𝗶𝘁𝗶𝗰𝗮𝗹 𝗣𝗿𝗶𝗼𝗿𝗶𝘁𝗶𝗲𝘀,” draws on fresh data from the NIPO June 2025 deliverable and highlights two key findings: 𝗦𝗵𝗮𝗿𝗽 𝗗𝗲𝗰𝗹𝗶𝗻𝗲 𝗶𝗻 𝗚𝗿𝗲𝗲𝗻 𝗣𝗼𝗹𝗶𝗰𝘆 𝗠𝗲𝗮𝘀𝘂𝗿𝗲𝘀 From January to June 2025, the number of industrial policies targeting green technologies—such as PV cells, wind turbines, electric vehicles, and hydrogen—was nearly half of what was announced in the same period in 2024. 𝗥𝗶𝘀𝗲 𝗶𝗻 𝗚𝗲𝗼𝗽𝗼𝗹𝗶𝘁𝗶𝗰𝗮𝗹 𝗮𝗻𝗱 𝗦𝗲𝗰𝘂𝗿𝗶𝘁𝘆 𝗠𝗼𝘁𝗶𝘃𝗮𝘁𝗶𝗼𝗻𝘀 Announced policies citing geopolitical or national security concerns now account for 54% of all measures, up from 22% in 2023–2024. In Western countries, this surge has displaced climate-focused initiatives, which now represent just 15%—lagging behind even competitiveness-oriented policies (20%). This shift is not mirrored in non-Western countries. The 2025 data signals a pivot away from climate goals toward geopolitical priorities. This shift risks undermining scale economies and fragmenting investment in green tech. 🔗 https://lnkd.in/dHaRGvUg Global Trade Alert

Just half of Unilever's closest industry associations actively support regulations needed for its climate transition plan to succeed. That's the high-level finding from the latest annual review by its sustainability team. Unilever belongs to more than 600 trade groups. Those assessed in the review — including the The Consumer Goods Forum and the Personal Care Products Council — represent sectors where more stringent regulations and policies are needed to support its emissions reduction goals. ➡️ Unilever will ditch relationships where "misalignment" remains after 12 months of engagement, although it prefers not to do this. ➡️ Just five organizations are actively engaged in supporting Unilever's climate policies, while 50 percent are “passive” — meaning they don’t speak out either way. Unilever wants those organizations to do more. Unilever is one of the few big companies that speaks out regularly about climate policy — many multinationals have gone silent for fear of retaliation by the Trump administration. Even those for which the impacts of climate change are an existential business risk. Its biggest causes: - Convincing countries to adopt national emissions reduction plans that will hold global temperature increases to 1.5 degrees Celsius - Advocating appropriate carbon pricing - Scaling up renewable energy capacity, while phasing out fossil fuels - Supporting forest protection and nature restoration - Encouraging the Greenhouse Gas Protocol to evolve carbon accounting standards to reward emissions reductions across corporate value chains More details in my analysis: https://lnkd.in/epyR6UeB ClimateVoice InfluenceMap Deborah McNamara Bill Weihl

Bank of America and Citigroup have officially left the UN-backed Net-Zero Banking Alliance (NZBA). The world’s largest climate alliance for banks. The NZBA is coalition of global banks committed to aligning their lending and investment portfolios with net-zero carbon emissions by 2050. Banks in this alliance pledge to reduce their support for industries that contribute heavily to greenhouse gas emissions (like fossil fuels) and increase funding for green initiatives. Citi was one of the founding members in 2021, marking it as a strong proponent of sustainable finance. Why Citi and BofA’s Exit Matters: Their withdrawal signals a potential retreat from aggressive climate goals in favor of maintaining relationships with traditional energy clients. When leading banks pull out, it can weaken the collective momentum of global finance aligning with sustainability goals. This is also a sign that corporate America may retreat from climate goals during Donald Trump’s second term as US president. Both banks, like others in the US, have faced increasing scrutiny from Republican lawmakers, particularly in states where fossil fuels are critical to the economy. These lawmakers argue that such alliances constrain energy security and discriminate against traditional industries, including oil and gas. Citi stated it would focus more on climate initiatives in emerging markets, suggesting a shift from the UN-led framework to independent efforts. Why You Should Care: For Climate Advocates: This development is a wake-up call about the challenges of aligning corporate and environmental goals, especially under political duress. For Investors: The shift could signal changing priorities in major banks’ strategies, affecting ESG (Environmental, Social, and Governance) investment portfolios. For Businesses: Companies reliant on fossil fuels may find easier access to financing, while those pursuing green projects could face higher hurdles. For Citizens: It reflects a broader trend where climate initiatives might take a backseat to economic or political priorities, potentially slowing global efforts to combat climate change. #ClimateChange #Banks #SustainableFinance

🤔The recent statement about financial institutions leaving the Net-Zero Banking Alliance (NZBA) 🧜♂️ Bank of America, Citigroup and Morgan Stanley have departed the United Nations-backed Net-Zero Banking Alliance. 🧜♂️ The exits come a few weeks after Goldman Sachs announced its decision to quit NZBA and against a backdrop of climate-focused alliances facing increased scrutiny from the Republican party, which has initiated probes on ESG policies across multiple fronts. 🧜♂️ Citi and BofA announced their departure from the global climate coalition — whose members have committed to aligning their financial activities with the aim of reaching net-zero emissions by 2050 — with Morgan Stanley following suit. 🤔 Is it a shift in strategy? Financial institutions may be opting for a different approach to addressing climate change, choosing not to be tied to specific global alliances. They might seek more flexibility in their climate-related strategies, possibly focusing on alternative forms of sustainability or different frameworks for achieving climate goals. 🤔 Is it due to an increased pressure on financial institutions? The departures highlight that some banks might be facing internal or external pressures that make it difficult to maintain their association with climate-focused coalitions. This could stem from political, economic, or shareholder concerns, or due to potential conflicts with their business models or interests in high-emission industries. 🤔 Is it a global disillusionment with voluntary climate pledges? The exit of major institutions could reflect broader disillusionment with the effectiveness of voluntary climate initiatives. Some stakeholders might be questioning the actual impact of such coalitions in terms of driving real change, especially when enforcement mechanisms are absent. 🤔 Is it due to a regulatory and policy uncertainty? The departures also suggest that there might be uncertainty regarding regulatory and policy frameworks around climate goals. Financial institutions could be grappling with conflicting regulations or unclear guidelines from governments, making it difficult to commit to certain climate pledges or targets. 🤔 Is there a re-evaluation of financial risk models? The financial institutions’ moves could signal a reassessment of how climate risk is integrated into their financial models and business practices. Rather than relying on climate alliances, these banks may be pursuing alternative strategies for managing environmental, social, and governance (ESG) factors that align more closely with their business goals and market demands. 😶🌫️ Overall, these developments could suggest a shift in the financial sector's approach to climate change, with both opportunities and challenges arising as institutions balance their business goals with growing pressure for climate action.

Wall Street cooling on climate commitments. Recent reports show a concerning trend of financial institutions withdrawing from key climate alliances. While these institutions often reaffirm their individual sustainability goals, these departures raise questions about the future of collaborative climate action within the financial sector. A few notable updates: 🟢 Major US banks, including Goldman Sachs, JPMorganChase, Bank of America, Citi, Morgan Stanley, and Wells Fargo, have exited the Net Zero Banking Alliance. 🟢 BlackRock, the world’s largest asset manager, recently left the Net Zero Asset Managers initiative. 🟢 The Net-Zero Asset Managers initiative has suspended all activities and removed its signatories from its website. ESG Dive has a great set of write ups on all of these exits / shifts - https://lnkd.in/gqQufFHt This shift comes amid increased scrutiny from some political figures regarding ESG initiatives. This scrutiny, coupled with evolving (unpredictable?) regulatory landscapes and perhaps shifting internal priorities, may be prompting financial institutions to re-evaluate their participation in these alliances. So, how should we read this trend? There's a good deal of discourse that I've found really interesting. Some argue that these withdrawals signal a weakening commitment to collaborative climate action, suggesting that companies are prioritizing short-term political pressures over long-term environmental goals. Others contend that companies are simply "recalibrating" their approach, choosing to focus on demonstrable internal actions rather than high-profile public memberships. It's also possible that these institutions are seeking more flexibility in their approach to climate action, finding that the constraints of formal alliances hinder their ability to navigate a complex and rapidly changing landscape. Regardless of the underlying motivations, these departures raise important questions about the most effective strategies for driving change within the financial industry...and have me wondering: where are the loudest voices and the boldest actions in this moment of "recalibrating" globally? #sustainability #circularity #finance #ESG #climatechange #netzero

🤔 What do the recent setbacks in climate alliances mean for climate transition planning? (It’s a long one but stay with me🤞). The recent withdrawals of US and Canadian banks from the Net Zero Banking Alliance, and the Net Zero Asset Managers initiative no longer tracking implementation of membership criteria, signals a concerning weakening in key climate alliances. It’s part of a trend fuelled by opposition to EU ESG regs & general coordinated ESG action from US investors, and increasingly EU players, who believe it’s stifling competition and making EU business un-investable. The most high-profile development in this trend is the EU Commission’s Omnibus proposal (the second best Omnibus after a Coronation Street omnibus*). And although this may be a good rebalance between compliance/reporting and innovation/action, abandoning coordinated efforts altogether is not the answer. Here's why: A strong climate transition plan recognises and addresses the externalities the business depends on to hit its climate targets. In many cases these require collective cross-industry action and can’t be solved by one business alone.    History reminds us that coordinated efforts can work (like the global ban on CFCs), and coordinated action, in some form, will be essential if we've any chance of meeting climate targets. But losing momentum behind alliances like these puts corporate climate targets, often reliant on cross-industry collaboration, at risk.   👉 Bonus for those that read to the end: My advice is to continue identifying the externalities in your climate transition plans and be clear about how you can influence the necessary changes - whether that's through existing alliances or new ones. *For non-Brits, this is an exceptional UK soap opera.

European businesses are not backing down from their climate leadership. Their industry groups, however, tell a different story. A recent InfluenceMap analysis featured in The Guardian highlights a clear gap: - Companies fully backing ambitious climate policies jumped from 3% in 2019 to 23% today. - Over half of European firms now show some alignment with the 1.5°C climate pathway. - Yet only 12% of industry associations fully support science-based climate policies, suggesting vocal minorities within these groups still dominate the agenda. This disconnect has real consequences. It’s part of why key sustainability measures were watered down in the recent EU Omnibus regulations. Industry lobbying, influenced by the least ambitious companies, weakened crucial environmental commitments. Companies serious about aligning their businesses with our shared future need to ensure their trade groups aren't undermining their own stated goals. https://lnkd.in/d54p9TQt

European companies aligned with climate goals rose from 3 to 23 percent between 2019 and 2025 🌎 A new analysis by InfluenceMap shows that the share of European companies whose lobbying activities align with climate goals has increased from 3 percent in 2019 to 23 percent in 2025. The research assessed the public policy engagement of 200 of the largest companies in Europe, indicating a growing trend of formal corporate support for climate policy frameworks compatible with the Paris Agreement. More than half of the companies reviewed were found to be at least partially aligned with pathways to limit global warming to 1.5 degrees Celsius. Meanwhile, the proportion of companies considered misaligned dropped from 34 percent in 2019 to 14 percent in 2025. These results point to a gradual reconfiguration of corporate engagement in climate policymaking. The methodology used by InfluenceMap placed higher weight on recent actions and formal policy consultations, such as regulatory feedback and public statements by senior executives. These criteria aimed to capture the depth and consistency of corporate involvement in climate advocacy beyond surface-level commitments or reporting. While individual companies show increasing alignment, industry associations continue to lag. Only 12 percent of associations were found to be aligned or partially aligned in 2025, compared to just 2 percent in 2019. This discrepancy suggests that trade groups may still reflect the positions of the most resistant members or serve as indirect channels for less transparent lobbying efforts. The report also identified several companies that continue to oppose key elements of the EU climate agenda. These include utilities, oil and gas producers, and transport operators whose lobbying records conflict with stated net zero goals. Some companies issued clarifications, while others declined to comment. This assessment coincides with a broader policy shift within the European Commission, which is prioritizing competitiveness after recent electoral outcomes. Environmental organizations have raised concerns that this pivot could reduce the ambition of the Green Deal. The increasing involvement of companies in climate advocacy may influence the direction of future regulation and industry expectations. Source: The Guardian #sustainability #sustainable #business #esg