Swiss Re CEO Christian Mumenthaler has said he has “high hopes” that companies in the World Economic Forum’s (WEF) Alliance of CEO Climate Leaders can reach their target of net zero carbon emissions by 2050.
Speaking in an interview with CNBC, Mumenthaler explained that the hardest challenge of the net zero pledge would involve getting the upstream and supply part of the value chain to meet carbon targets.
Mumenthaler, who is Co-Chair of the WEF’s Alliance, warned that it will become “exponentially harder” to neutralize carbon emissions as companies approach 2050 and are confronted with more distant parts of the chain.
For instance, many of the companies participating in the Alliance operate in the consumer goods industries, who must contend with upstream industries such as mining and transportation.
But Mumenthaler believes that theses issues can be surmounted if CEOs collaborate effectively, and if emerging technologies that offset carbon emissions can be leveraged.
“These sectors on their own will find it very difficult to get to zero,” he told CNBC. “But if you look through the value chain and look at the cost for the end consumer of these products, it’s actually not that much more that they would have to pay.”
“So we have high hopes that if we bring everybody together across the value chains we can get to this target of 2050 net zero, which is a tough target,” he added.
Asked about the issue of carbon pricing, Mumenthaler noted that Swiss Re had previously seen this as the solution to the climate issue during its past discussions with the WEF.
“But nothing has moved,” he said, while noting that the credibility of carbon credits is no longer sufficient.
“This is why this new target of net zero is not buying these credits. It’s to guarantee that the CO2 is not emitted or that it is extracted from the atmosphere,” Mumenthaler went on. “It’s much tougher, and some of the technologies to do that are not yet here.”
He concluded: “I think a lot of CEOs have seen that and understand that, and there’s been a bit of a switch away from this carbon trading towards the real measurement and action around the actual CO2 that you are emitting, or that your supply chain is emitting.”