Climate Week NYC saw the First Movers Coalition, a global initiative to decarbonise seven “hard-to-abate” industrial sectors that account for 30% of global emissions, launched its Finance Pillar. This brings together financial sector players to develop a blueprint to mobilize finance and improve understanding of medium- to long-term risks.
- First Movers Coalition launches Finance Pillar at Climate Week NYC.
- Positive to see continued moves to finance the decarbonisation of seven hard to abate sectors.
- Rio Tinto joins the Coalition, highlighting the credibility gap with hard to abate sectors like mining focusing emissions reductions on Scope 1 and 2 alone.
The Finance Pillar is intended to bring together financial sector players to develop a blueprint to mobilise finance and improve understanding of medium- to long-term risks.
How does the First Movers Coalition work?
The goal of the Coalition is to provide a market signal, using the collective power of procurement to put pressure on industry to decarbonise. That means that they have each committed to buy net zero (or near net zero) products, despite a cost premium, to help promote market development. To date the Coalition covers roughly $8.5 trillion in economic activity across five continents
The 50+ members of the Coalition are particularly focused on seven “hard to abate” industrial sectors that currently account for 30% of global emissions: aluminum, aviation, chemicals, concrete, shipping, steel, and trucking.
For these sectors to decarbonise at the speed needed to keep the planet on a 1.5-degree pathway, they require low-carbon technologies that are not yet competitive with current carbon-intensive solutions but must reach commercial scale by 2030 to achieve net-zero emissions globally by 2050. For that reason they are also interested in driving the development of innovative carbon removal technologies, as they are likely to be central to some sectors decarbonisation plans.
Mining giant joins First Movers Coalition
Days prior to the announcement global mining giant Rio Tinto joined the Coalition. Chief commercial officer Alf Barrios said: “We want to bring Rio Tinto’s considerable buying power to help build sustainable supply chains for emerging green technologies. The low-carbon transition is at the heart of our business strategy and success will require large scale of change throughout the value chain, which our pledges to the First Movers Coalition are aimed at supporting.”
While Rio Tinto has set itself a target of net zero by 2050, those targets can hardly be considered credible given the impact of mining. It has set a target of a 50% reduction in Scope 1 and 2 emissions by 2030, backed with an estimated investment of approximately $7.5 billion in capital.
It remains to be seen how it plans on addressing its scope 3 emissions but engaging in a wider industrial coalition can only be a positive move.