Davos ramps up pressure on industries to tackle climate crisis

18th January 2024

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Up to three quarters of the global building industry’s emissions could be slashed if the engineering and construction sectors embedded circular economy principles in their operations, according to a major report.

The study by McKinsey and the World Economic Forum (WEF), published in time for this week’s Davos Summit, argues recycling materials, reusing components and boosting material efficiency will be vital to the sectors’ transition to net-zero by 2050.

A third of global material consumption is attributed to the built environment but four gigatons of emissions can be prevented by creating a circular economy for aluminium, cement, concrete, glass, gypsum, plastics and steel. This could also create an annual net profit of up to $360 billion by 2050.

Meanwhile, PwC’s annual survey of 4,700 chief executives, released at Davos, reveals 45% believe their company will not be viable in ten years if it follows “business as normal”.

Climate change is the main driver for business reinvention in the next three years for 30% of leaders, particularly in their supply chains or through offering different products or services. Technology, changes in customer preferences, and government regulation are other key challenges for businesses.

Elsewhere 120 chief executives of major corporates representing the International Business Council (IBC) have backed a WEF initiative aimed at reducing energy demand by 31% in a bid “to get back on track to meet the targets set by the Paris Agreement”.

A WEF study highlights measures such as using artificial intelligence to optimise factory line design, energy efficiency, value chain collaboration, industrial clustering to share clean energy initiatives, retrofitting buildings and transport electrification.

"Reducing the amount of energy needed to manufacture products and deliver services is something we can act on now,” says IBC chair and Banco Santander group executive chair Ana Botín. “Although progress is being made, there is a lot more to be done, and the fact is that our energy demand continues to rise at unsustainable rates.”


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