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John Kerry: Businesses are taking climate seriously but ‘we’re in a lot of trouble’

July 30, 2021, 9:34 AM UTC

Good morning.

President Biden’s Special Envoy for Climate John Kerry spoke to members of Fortune’s CEO Initiative yesterday and agreed with what I’ve been saying for months: that business efforts to address climate have reached an inflection point.

There is a very significant increase in dialogue in boardrooms of corporate America on ESG and sustainability, and money is beginning to move, and that’s not insignificant… I’ve been working with the six largest banks in the United StatesGoldman Sachs, JP Morgan, Bank of America, Morgan Stanley, Wells Fargo, State Streetand their commitments to what they will invest in climate, their floor, is $4.6 trillion. That’s without Larry Fink and Blackrock and other asset management entities which are talking about doing a trillion of their own, maybe two.”

Yet in spite of that, Kerry told the CEOs that “we’re in a lot of trouble.” Citing recent international agency studies, he said that in order to achieve carbon neutrality by 2050

“…we would need to be accelerating our deployment of renewable energies six times faster that we are today, we’d have to be planting trees five times faster than today, we’d have to be phasing out coal five times faster than today, we’d have to be transitioning electric vehicles 22 times faster than today.”

Asked by one of the CEOs about Europe’s effort to place a carbon tax on imported products that aren’t reducing carbon emissions sufficiently, Kerry said:

I would characterize Europe as, generally speaking, more prone to … regulatory and mandatory solutions and I would characterize us as being more entrepreneurial and incentive oriented, and I think that’s a better way to do things.”

But then he added:

If China is on a ruinous path and the rest of us are all trying, we may have no choice to result to some sort of a broad-based CBAM (carbon border-adjustment mechanism). Europe would join and that would be the largest consumers of the world and clearly have a very big impact on China’s economy. So we just have to see how this plays out.”

That sounds like a threat. More news below.

Alan Murray
@alansmurray

alan.murray@fortune.com

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This edition of CEO Daily was edited by David Meyer.

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