Winning the Race to Net Zero: The CEO Guide to Climate AdvantageINSIGHT REPORTJANUARY 2022In collaboration with Boston Consulting Group ContentsForewordExecutive summary 1 Global climate action accelerates (but remains insufficient)2 Change will happen faster than you think2.1 We underestimate technology progress2.2 We underestimate policy2.3 We underestimate when change will hit us3 The early mover advantage 3.1 Climate leaders can attract better talent3.2 Climate leaders play in higher-growth segments3.3 Climate leaders save costs3.4 Climate leaders reduce their risk exposure 3.5 Climate leaders reinforce their access to cheaper capital3.6 Climate leaders create higher shareholder value4 Individual companies can change the game 4.1 Raise the bar 4.2 Reshape your context4.3 Disrupt your business model4.4 Save cash while saving carbon4.5 Pioneer a net-zero product5 The CEO Guide to Climate Advantage 6 Think bigger, act faster Contributors Endnotes345899101313141516171819192021222224323335Cover: Gettyimages/Petmal Inside: Gettyimages/imaginima; Gettyimages/artJazz 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.© 2022 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.Winning the Race to Net Zero: The CEO Guide to Climate Advantage2 Climate action has seen several critical milestones in 2021. The latest Intergovernmental Panel on Climate Change (IPCC) report has been called a “code red for humanity” due to human-caused global warming. We need to collectively and urgently step up efforts to “keep 1.5°C alive”. While COP26 in Glasgow achieved meaningful progress in raising national and non-state actor ambitions and in progressing the central provisions of the Paris Agreement, significant gaps remain. National emission-reduction commitments for 2030 and 2050 still fall far short of the required 1.5°C pathway and many business leaders still lack the proof of delivery required.Companies can help lead the change. Achieving net zero by 2050 will require a full transformation of many aspects of our economy and society – supported by governments, investors, companies and consumers. This World Economic Forum and Boston Consulting Group report explicitly takes a business perspective. Leadership and action by the private sector are critical to accelerate climate action in tandem with bold actions by government leaders. Building on unprecedented private-sector momentum, it explores the ways in which early movers are changing the game for their sectors – and beyond – while securing sources of business advantage. Corporate climate leadership is a means both to do good and to create value. The findings of this report are based on quantitative and qualitative evidence from across the public and private sectors. We conducted interviews with nearly two dozen CEOs (chief executive officers) and senior executives from leading companies across regions and sectors – from energy to chemicals and industrials to consumer goods and food. We analysed corporate data from CDP, the Science Based Targets Initiative (SBTi) and financial databases. Our analysis was supplemented with additional research from a range of sources, including the International Energy Agency (IEA), Climate Watch, IRENA, the World Bank and Climate Action Tracker, in addition to previous work by Boston Consulting Group.This year’s World Economic Forum Annual Meeting must continue to raise climate ambitions, but also focus on translating bold commitments into near-term action and delivery by focusing on three key areas. First, engage leaders to close the emissions gap and translate targets into concrete roadmaps. Second, catalyse this transformation to ensure delivery through a just and equitable transition. Third, mobilize all of society to ensure their expectations are met and that leaders fulfil their commitments. We are in the decade of urgent delivery. With an acceptance of the crisis and surging ambition, leaders must ensure that bold action follows. The benefits of action are clear, and the costs of inaction pose a threat to all of humanity.ForewordAntonia Gawel Head, Climate Action, World Economic ForumPatrick Herhold Managing Director and Partner, Center for Climate and Sustainability, Boston Consulting GroupWinning the Race to Net Zero: The CEO Guide to Climate AdvantageJanuary 2022Winning the Race to Net Zero: The CEO Guide to Climate Advantage3 The immediacy, pace and extent of change are still widely und