The Cost of Inaction 2024

41. World Bank Group. (2024). State and Trends of Carbon Pricing Dashboard. https://carbonpricingdashboard.worldbank. org/compliance/coverage. 42. With the European Union’s carbon border adjustment mechanism (CBAM) coming into effect, free allowances for EU companies will largely be withdrawn. 43. Figures, T. et al. (2021). The EU’s Carbon Border Tax Will Redefine Global Value Chains. BCG. https://www.bcg.com/ publications/2021/eu-carbon-border-tax. 44. International Energy Agency (IEA). (2024). A steep decline in coal emissions is essential to reach our climate goals. https:// www.iea.org/reports/coal-in-net-zero-transitions/executive-summary. 45. Examples of premature asset write-offs already exist today. Uniper, a German utility, brought its last new coal power plant – a 45-year asset – online in 2020, just after Germany announced its 2038 exit from coal. Under the most ambitious current coal exit roadmap, it may have to shut down after only ten years. The Nord Stream 2 gas pipeline – a 40-year asset – would have gone online just as European gas consumption passed its peak and less than 30 years before Europe aims to consume no more natural gas whatsoever. 46. Grey assets refer to mainly fossil-fuel based assets. 47. Between 2008 and 2018, several conventional German utilities lost 75% to 80% of their market capitalization. 48. The fact that a green investment is economic relative to the fossil alternative does not automatically translate into an investment incentive; but it does indicate that companies in most sectors can still find cost-efficient mitigation investment opportunities – even those that are far advanced in their transition – and increasingly so as carbon prices increase. 49. BCG and CO2 AI Carbon Emissions Survey 2024. (2024). Boosting Your Bottom Line Through Decarbonization: Carbon Emissions Survey Report 2024. https://web-assets.bcg.com/09/68/8b0f9c5c4dea8c37f757b87705f3/why-climate- leaders-are-seeing-bottom-line-results-sep-2024-edit-04.pdf. 50. A just transition could help the 1.7 million US fossil fuel workers and millions globally who will need new jobs due to decarbonization (as per Alkin et al., Brookings). The ILO estimates 24 million new energy sector jobs could be created by 2030, offering opportunities for sustainable growth 51. BCG Center for Sensing & Mining the Future; BCG analysis. 52. World Economic Forum. (2022). Winning the Race to Net Zero: The CEO Guide to Climate Advantage. https://www3.weforum.org/docs/WEF_Winning_the_Race_to_Net_Zero_2022.pdf. 53. 2023 BCG/The Network/The Stepstone Group proprietary web survey and analysis. 54. Kronthal-Sacco, R. and Whelan, T. (2024). Sustainable Market Share Index™. New York University (NYU) Stern Center for Sustainable Business. https://www.stern.nyu.edu/sites/default/files/2024-05/2024%20CSB%20Report%20for%20 website.pdf. 55. BCG analysis. 56. BCG analysis. 57. Jennifer Meszaros, J. (2024). Airbus Forges Ahead With Sustainability Goals. AIN. https://www.ainonline.com/aviation- news/air-transport/2024-02-21/airbus-forges-ahead-sustainability-goals. 58. Airbus. (2024). Airbus and partners invest in Sustainable Aviation Fuel financing fund. https://www.airbus.com/en/ newsroom/press-releases/2024-07-airbus-and-partners-invest-in-sustainable-aviation-fuel-financing . 59. World Economic Forum (2023). Accelerating Business Action on Climate Change. https://www3.weforum.org/docs/WEF_ Climate_Change_Adaptation_2023.pdf. 60. World Economic Forum. (2010-2024). Global Risks Report. https://www.weforum.org/publications/series/global-risks-report/. 61. Network for Greening the Financial System (NGFS). (2024). Scenarios Portal: The future is uncertain. https://www.ngfs.net/ ngfs-scenarios-portal/. 62. World Economic Forum. (2023). How scaling up collaboration and engagement can help tackle scope 3 upstream emissions. https://www.weforum.org/agenda/2023/11/scaling-up-collaboration-engagement-scope-3-emissions/. 63. World Economic Forum. (2024). Net-Zero Value Chain – Support Hub. https://initiatives.weforum.org/net-zero-supply- chain-support-hub/home. 64. Repsol. (2023). Investor Update March 2023: Stepping up the Transition, Driving growth and value. https://www.repsol. com/content/dam/repsol-corporate/en_gb/accionistas-e-inversores/pdfs/investor-update-march-2023.pdf. 65. World Economic Forum. (2024). Innovation and Adaptation in the Climate Crisis: Technology for the New Normal. https://www3.weforum.org/docs/WEF_Innovation_and_Adaptation_in_the_Climate_Crisis_2024.pdf . 66. World Economic Forum. (2024). Bold Measures to Close the Climate Action Gap: A Call for Systemic Change by Governments and Corporations. https://www3.weforum.org/docs/WEF_Bold_Measures_to_Close_the_Climate_Action_ Gap_2024.pdf. 67. Based on CMIP6 modelling results (Coupled Model Intercomparison Project), Carbon Brief estimates that the world will likely exceed 1.5°C between 2026 and 2042 in scenarios where emissions are not rapidly reduced, with a central estimate of between 2030 and 2032. The 2°C threshold will likely be exceeded between 2034 and 2052 in the highest emissions scenario, with a median year of 2043. Source: Hausfather, Z. (2020). Analysis: When might the world exceed 1.5C and 2C of global warming? Carbon Brief. https://www.carbonbrief.org/analysis-when-might-the-world-exceed-1-5c- and-2c-of-global-warming/. The Cost of Inaction: A CEO Guide to Navigating Climate Risk 57