GUEST PERSPECTIVE Business is backing the accelerated energy transition By Ana Botín, Group Executive Chair, Banco Santander; Chair, World Economic Forum International Business Council Recent experiences underline how crucial a secure, First, supported by our knowledge partner PwC, the IBC will affordable and sustainable energy system is to economic create a common vision for demand-side energy transition, growth, and an orderly and equitable transition. Look at with an eye towards reducing energy consumption as a the impact that rising energy prices have had on stoking portion of GDP and carbon-intensity within that equation. A in昀氀ation, which has hit low-income families and small key part will be how we support emerging and developing and medium-sized enterprises (SMEs) the hardest. This countries to do this. We will survey IBC members to help underscores the need for the energy transition, which the identify best practices, priorities and existing plans and targets, World Economic Forum supports, to tackle the trilemma: how as well as obstacles, which we will use as a baseline for do we get energy that is low carbon, affordable and reliable, action. Second, we will engage governments and multilaterals underpinning the growth needed to 昀椀nance the transition. to advocate for the policies needed to remove obstacles and promote demand-side energy transition, while also exploring The Forum’s International Business Council (IBC) has opportunities to contribute to sectoral transition frameworks. launched a project that can harness its members combined economic impact – 130 companies representing roughly IBC members, who are global leaders in their respective 3% of global energy demand – to accelerate the energy industries and regions, are uniquely placed to help accelerate transition. This project is not only a challenge, requiring the energy transition by catalysing company, sector and collaborative action across sectors, industries and borders, country-level action. The community has an opportunity but also an opportunity to foster growth and in昀氀uence the to leverage its collective in昀氀uence and convening power to way our economies and societies can provide safer, fairer and accelerate a low-carbon, secure and just transition of the more sustainable outcomes. global energy system by bringing together the private sector, governments and international organizations. Much of the focus has, understandably, been on energy supply. However, according to the International Energy We know the limits of a one-size-昀椀ts all approach but are also Agency’s Net Zero by 2050 pathway, to meet the Paris convinced we can share solutions and ef昀椀ciencies that can Agreement’s emissions goals by 2050, the world will need be adapted to have impact. We will not forget the importance to consume 8% less energy than it does today. At the same of SMEs and developing countries in this regard. We will not time, the world’s economies will need to grow in a sustainable only seek ways to support and incentivize them, but also to manner to provide for 2 billion more people. This means that unlock equity 昀椀nancing for the transition. All IBC members energy consumption as a portion of economic output as well are affected by the energy transition, and are relevant in as the carbon intensity of the energy individuals consume will in昀氀uencing it, both as energy consumers and producers. have to decline – that is, people will have to be smarter and more ef昀椀cient in their energy use. Banks, too, must play a role. Financing the energy transition is, and will continue to be, one of the major challenges, and IBC members have decided to focus on the demand side of opportunities, for 昀椀nancial institutions. This is especially true in energy transition. Managing and reducing the energy intensity Europe, where 70% of business 昀椀nance comes from banks. of demand is an area where our companies, as leaders in their sectors and as stakeholders in their home countries, can The task is daunting, but the goal is attainable if we foster more ef昀椀cient use of energy and promote policies and work together. Through collaboration within the business practices that can lead to success. The aim is to do this in a community, the public and private sectors and relevant global way that complements, rather than duplicates, other similar bodies, we can build an energy system that is low carbon, initiatives, within and outside the Forum’s ecosystem. affordable and reliable. Fostering Effective Energy Transition: 2023 Edition 14