Climate change is among the priorities of the 2021 G20, under Italian Presidency, as Rogerio Ghesti, Head of International Policy, ICC United Kingdom, explains
The International Chamber of Commerce has supported the G20 since its inception, promoting both engagement and thought leadership to the Business Stakeholder Dialogue (B20).
The Group of Twenty (G20) matters in terms of global governance because it has a wider representation of the current international balance of power than other traditional coalitions, such as the G7. The G20, accounting for more than 80% of world GDP, 75% of global trade and 60% of the population of the planet, was initially conceived as a platform for the most important industrialised and developing economies to discuss international economic and financial stability. However, it was not until 2008 that the group emerged as a true force for global political coordination after delivering a quick and robust response to the financial crisis. Over the years, other policy issues which involve mutual interest were added to the G20 agenda. A business stakeholder group (B20) was also established in 2012, allowing for input from a private sector perspective.
The G20 was founded in 1999 MSMEs account for 99.9% of all the UK corporates
The G20, not being a permanent institution with a headquarter, offices, or staff, has its leadership rotating on an annual basis among its members; its decisions are made by consensus, and implementation of its agenda depends on the political will of the individual states. Every new cycle means an opportunity for the hosting country to urge action towards the delivery of effective solutions.
In 2021, the Italian Presidency has put the PLANET at the centre of its agenda, clearly merging pressing global issues like climate change, land degradation, biodiversity loss and the achievement of the UN Sustainable Development Goals to the urgent need for post-pandemic economic recovery.
A transition towards renewable energies and a green recovery, with a focus on modern, “smart” cities, is essential and is among the main priorities promoted by the Italian Presidency. New tools for sustainable urbanization, energy efficiency, improved modern mobility are also under discussion. The G20 will also pave the way towards the 26th Conference of the Parties of the United Nations Framework Convention on Climate Change (COP26), co-hosted this year by Italy and the United Kingdom.
However, policy makers agree that effective solutions heavily depend on multi-stakeholder collaboration and new levels of ambition. National governments have a key role to play as only coherent policy frameworks and the right incentives will drive economies of scale capable to securing the necessary conditions to our common well-being, to international peace and security and, ultimately, to our long-term survival on planet Earth.
Businesses are committed to this transition not only because it is the right thing to do but also sustainability makes business sense. Boards have been integrating sustainable transition into their business strategies and a number of corporations have now made public commitments to their transition plans. The real challenge still lies, however, in support to micro, small and medium enterprises (MSMEs), which represents approximately 90% of business worldwide and creating over two billion job opportunities. They are important for social stability, innovation, equitable growth, and poverty alleviation, and they form the backbone of the working middle class. At the same time, they face a multitude of challenges, such as access to finance or having to navigate complex regulatory frameworks.
Despite being integral actors in a successful net zero transition, the lack of capacity among MSMEs in climate action severely undermines overall progress. Taking the United Kingdom as an example, MSMEs account for 99.9% of all the UK corporates and half of the business-related emissions. There is a pressing need to utilise the B20/G20 platform for collective solutions to assist all businesses in their sustainable transition.
The International Chamber of Commerce, together with other business organisations and representatives of the private sector are heavily engaged with the B20 taskforces, ensuring that appropriate support to MSMEs is captured among recommendations to G20 Leaders. The G20 has the power to promote a coordinated response to support the global sustainable transition. Ultimately, it all depends on the political will of its members.