Foreword Progress towards the Paris Agreement goal of limiting warming to 1.5 degrees is significantly off-track. Indeed, recent estimates by the United Nations Environment Programme suggest our planet is likely to warm by 2.6 degrees compared to pre-industrial levels. As the global energy system undergoes rapid transformation, leaders across sectors must collaborate to accelerate an energy transition, creating positive outcomes for people, society and the planet. The private sector can play a leading role in driving this transformation. That is why, in 2023, the International Business Council (IBC), a group that together represents 3% of global energy use, decided to focus on energy demand. This is an under-addressed area, action on which will allow us to increase economic output, while reducing greenhouse gas emissions (GHG) and driving up global access to energy. Our research reveals that there are many tangible actions that all businesses can take today to act on energy demand. The potential of this demand-side action is extraordinary, offering a short-term, cost- efficient reduction of 31% in demand, shared across all economic sectors. These gains are achievable today, offering a practical, scalable and high-impact pathway to get the world on track to meet the Paris Agreement targets. At the same time, it would support delivery of the pledge by over 120 countries at the 28th United Nations Climate Change Conference (COP28) to double the global average annual rate of energy efficiency improvement to over 4%.However, progress is not fast enough. The annual rate of energy efficiency improvement only reached 1.3% in 2023. At the same time, energy efficiency is at risk of decreasing in prominence on the international stage, having received limited coverage during COP29. Policy-makers can act to change this across all nations. Government leadership has the potential to empower the private sector to do far more if it can create an enabling environment for action on energy demand. Our research identifies the absence of this government leadership as one of the major barriers to progress. Working across the IBC and with partner organizations, we have identified the most promising public sector approaches: establishing robust national energy plans that include energy demand, mobilizing finance and driving improvements across industry, buildings and transport. By focusing on these areas, together, public and private actors can work to decarbonize economies, improve energy security and enhance global competitiveness. We extend our gratitude to the IBC members and all contributors who have enriched this effort with their expertise. This document is both a call to action and a guide, inviting leaders across government to act on demand-side energy solutions. We hope that this will prove valuable in advancing efforts towards a more sustainable, resilient and equitable global future.Ana Botín Executive Chair, Banco Santander; Chair of the World Economic Forum International Business CouncilOlivier M. Schwab Managing Director, World Economic Forum Transforming Energy Demand: Accelerating Business Action through Government LeadershipJanuary 2025 Transforming Energy Demand: Accelerating Business Action through Government Leadership 3

Transforming Energy Demand 2025