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Iberdrola, other companies urge governments to plan green exit from COVID-19

Executives from more than 150 companies around the world that have a combined market capitalization of more than $2.4 trillion have signed a statement calling on governments to plan a green economic recovery from the COVID-19 crisis.

"As countries work on economic aid and recovery packages in response to COVID-19, and as they prepare to submit enhanced national climate plans under the Paris Agreement, we are calling on governments to reimagine a better future grounded in bold climate action," said the statement, which was organized by the Science Based Targets initiative.

SBTi certifies when companies have developed decarbonization pathways that align with the emissions reductions scientists say are needed to limit global warming to well below 2 degrees C relative to pre-industrial levels.

More than 800 companies have created science-based targets or pledged to do so. SBTi co-founder Cynthia Cummis in an interview said she expects more CEOs will sign the COVID-19 green recovery statement over time. The companies that signed the document pledged to continue to pursue science-based climate targets and lobby governments to follow suit.

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"By advocating for enabling policies aligned with a 1.5 degree C trajectory and zero-carbon economy, we look to policymakers to give businesses the confidence and clarity they need to take ambitious climate action," the statement said.

Most of the companies that signed the document are based in Europe, with the biggest sectors being energy, food and beverage processors, professional services, and software and related services companies, according to figures SBTi shared with S&P Global Market Intelligence. Those companies include The Unilever Group, EDF Group, Mars Inc, Tate & Lyle, Novartis AG, Hewlett Packard Enterprise Co. and Iberdrola SA.

SNL Image

Iberdrola's Valdeporres wind farm near the city of Burgos in northern Spain.
Source: Iberdrola

In an interview, Iberdrola Vice President of Energy Policies and Climate Change Carlos Sallé explained that the company makes long-term investments. In making those decisions, it analyzes and follows megatrends that he said have been reinforced by the pandemic.

Sallé said those megatrends include the importance of listening and following sound science, knowledge that low-carbon technology can continue to reduce energy costs compared to fossil-fuel technology, and recognition that air pollution is a problem that needs to be addressed.

Climate change increases extreme weather events and other challenges exponentially, Sallé said. As such, he added, "we cannot respond to this problem with linear solutions, we need exponential solutions."

Sallé recalled that Iberdrola's Executive Chairman and CEO Ignacio Galan during the company's annual general meeting in early April vowed to speed up investments in "sustainable energy infrastructure."

The CEO said the company's investment in such infrastructure during 2020 will exceed the €10 billion made in 2019. Noting that the company recently spent more than €3.8 billion on sustainable energy infrastructure, Galan said such moves give suppliers greater certainty and the confidence needed to retain their employees.

The company has a "total conviction that we will come through this situation" and "new infrastructures will be absolutely necessary in the future," Galen said. By the end of 2020 Iberdrola plans to bring online at least half of its 9,000 MW of projects under construction. The company has 30 solar plants, 50 onshore wind farms, and battery and transmission line projects in the works around the world, he said.

SBTi is a collaboration between CDP — formerly the Climate Disclosure Project the United Nations Global Compact, World Resources Institute and the World Wide Fund for Nature.