The business case for climate action

However unreal it can seem, it is very likely we find ourselves in the most important decade in the history of humankind. The speed of change in technology, together with the exponential impact we have, puts the world we love at risk. Nature loss and climate change are no longer distant threats but are upon us. The human suffering we have witnessed this summer from droughts, fires and extreme flooding is man-made.

For most business leaders, uncertainty has become boardroom weather now and is no longer the seldom interruption in otherwise cool climes. Geopolitical strain, unpredictable energy prices, stretched supply chains and more frequent extreme weather now sit inside ordinary business decisions about cost, investment and growth.

In such an environment, it is tempting to think that climate and nature are something that comes later in the pecking order of urgent priorities that stare us square in the face every day. I believe it is time to reverse this order. Instability itself is what makes the case for acting now stronger and the value is more economic now than it has ever been.


Three reasons stand out to motivate us to roll up our sleeves and do what’s right:

1. Ethical The consequences of a warming planet are no longer forecasts. They are in the harvest, the water table, the insurance premium and the heatwaves we have all been privy to in different parts of the world. World Meteorological Organisation found that 2024 was the warmest year in the 175-year observational record, at about 1.55°C above the pre-industrial average.

With workable solutions already in hand, handing a large version of the problem to the next generation is not a position any of us can defend. This is not an issue we can hand over to the next generation.

2. Reputational Facts show us that a majority of customers and employees expect a business to take responsibility and act on it. People ask for honest intentions and efforts rather than claims of perfection.

Move down the age groups and you will understand this is a trend that will increase rapidly. A company and a leader who chooses to stay silent risks paying for it in trust, talent, relevance and revenue.

3. Being smart This reason has changed the most, and it is where very exciting momentum lies. Being climate and nature smart increasingly means being resource smart, cost smart, and more resilient. Energy you do not waste is energy you do not buy. Material you keep in use is material you do not repurchase. A supply chain designed for volatility is one that survives it.

None of this is ‘feel-good’ charity; it is sharper business and operational discipline that also happens to lower emissions and carbon footprints.

We often hear voices saying that too little is done, and that we are too slow. This is not true. What is true is that we started late. WEF CEO Climate Alliance is gathering 126 of the biggest companies in the world. They all have in common a deep sense of responsibility for the problem and a willingness to be part of the solution. The impact, and as such the opportunity, is massive.

The collective end-to-end carbon footprint (Scopes 1, 2 and 3) is larger than the third-biggest country in the world. Eight years ago we had little but good intentions. Though different industries have different challenges, the efforts show revenue growth of 12% last year while reducing absolute carbon emissions by more than 10%. This shows not only that it’s possible but that it’s good business to be a good business.

Every fraction of a degree by which we increase global temperature adds to what the future needs to clean up. As we started late, we are in a hurry and we may not have time to do this job in a linear way. Most of us were trained to expect change to be gradual and proportional – bigger problems, bigger budgets, slow progress.

Many of the systems we rely on today in fact resist change until they cross a threshold beyond which progress becomes self-propelling: costs fall, adoption rises, adoption draws in investment and investment lowers costs again. What turns these individual advantages into genuine transformation is a pattern scientists call a positive tipping point.

We are watching it happen now with energy. Solar power has already crossed that threshold worldwide and is the cheapest source of new electricity in most markets. Electric mobility is crossing it in one leading market after another. International Renewable Energy Agency’s ‘Renewable Capacity Highlights 2026’ reports that the world added a record 692 GW of renewable power capacity in 2025, an annual increase of 15.5%.

Solar and wind accounted for 96.8% of all net renewable additions. Renewables supplied 85.6% of total new power capacity added during the year and, by year-end, represented 49.4% of global installed power capacity. This is no longer a technology at the margins; it is where most new capacity is being built.

Technologies once treated as expensive alternatives are becoming the economically obvious choice. A solution that once depended almost entirely on climate commitment is now winning on price. Investments that looked like acts of faith not long ago are now, quite simply, good business.

Recent University of Exeter analysis for The Earthshot Prize lays out exactly what it takes for a solution to become a positive tipping point: it must become affordable enough to beat the incumbent, accessible enough to reach the people that need it and attractive enough that choosing it is the obvious call. Affordability decides the pace of scale for these solutions.

A cleaner option that costs more stays niche; one that costs less becomes the default. That is the sharpest test for any green claim--not ‘Is it better for the planet?’ but ‘Is it on its way to being cheaper?’

Nowhere is that clearer than in energy. The current geopolitical environment has turned dependence on volatile imported fuel from a background cost into an immediate strategic risk--one that price shocks and supply disruptions can trigger without warning. Clean electrified operations are increasingly the hedge against it.

Business sentiment the world over already reflects this. The ‘2026 Powering Up Business’ survey of 1,994 business leaders across 18 economies, including India, found that 91% expected electrification to improve energy security, 88% believed it would make their businesses more competitive, and 90% expected their operations to be largely electrified by 2035. 84% expected it to reduce long-term operating costs.

That is not idealism, but risk management. Generating and controlling your own clean power buys something scarce right now: independence.

The transition will not run on technology alone. Businesses often decide whether a promising solution stays at the fringes or becomes standard, using levers they already hold. The most powerful lever is demand. Supply chains are concentrated enough that a critical mass of committed buyers can move a market’s default: agree to cleaner sourcing, or pool purchasing into guaranteed long-term demand, and the economics reorganise for everyone upstream.

Put new technology to work inside our own factories, buildings and fleets. Steer investments towards solutions ready to scale. Each decision looks small. Together they bend cost curves and give markets confidence to commit.

But businesses, as powerful as they are, cannot do the last part alone. Once a shift is underway, governments and policymakers help lock that change in--through new reforms, faster infrastructure to support mass-scale adoption and standards that reward the change itself and ensure that the long-term benefit accrues from the investments that were made upfront. The ‘Powering Up Business’ survey found that 72% of leaders believed policy was moving too slowly to support the pace of electrification their businesses needed.

What we need is less subsidy than predictability and a real seat in shaping the rules we operate under. And because supply chains, capital and technology ignore borders, cross-border alignment matters just as much: common standards and investment frameworks let good solutions scale more freely than any one market could achieve alone.

Though new subsidies may not always be needed, businesses need governments to act faster to remove harmful old-economy subsidies to set the new world economic framework and speed up change.

India sits in a strong position. As it builds out manufacturing, infrastructure, mobility and energy capacity at pace, it should design efficiency, resilience and lower-carbon technology into that growth at the outset. Its renewable expansion already shows the speed that is possible.

The next step is to connect clean power with stronger grids, storage, electric transport, efficient buildings and cleaner industry, so progress in one reinforces the rest. Built together, these are not costs to manage. They are foundations of competitiveness for the decades ahead.

The global case for climate action is getting stronger. The open question is no longer whether the transition has begun, but whether we are moving fast enough to turn today’s momentum into the moment that the change becomes unstoppable.

The train to a better future has left the station. It is true that the ride is bumpy but as a great optimist said, it is downhill bumpy. And the last place you want to be right now is left at the station.

The writer is former CEO, IKEA, and chair, The Earthshot Prize