Two Degrees of Transformation

The report outlines five key trends for business transformation to combat climate change: reinventing business models, bridging sectors, creating sustainable value chains, harnessing data/connectivity, and financing the transition. It provides global examples of companies shifting from fossil fuels to renewables, developing low-carbon construction materials, and using AI and IoT for environmental management. The document emphasizes the role of the Alliance of CEO Climate Leaders and the necessity of scaling private investment through green bonds and climate-smart portfolios to meet Paris Agreement targets.

• To achieve the Paris Agreement target of keeping global temperature rise well below 2° Celsius, greenhouse gas emissions must peak by 2020 and reach net-zero by 2050.
• Systemic transformation is required across six critical private sector areas: energy (replacing fossil fuels), infrastructure (climate compatibility by 2050), transport (zero-emission), land use (ending deforestation), heavy industry (aligning iron, steel, cement, and chemicals with Paris targets), and finance (climate-risk reporting and low-carbon investment).
• Several companies are fundamentally reinventing their business models to survive the low-carbon transition. For example, Ørsted transitioned from oil and gas to renewables, cutting coal consumption by 73% since 2006 and aiming for a total phase-out by 2025. ACCIONA shifted from a domestic construction focus to a multinational providing renewable energy and water services, with over 72% of 2016 earnings coming from environmental services.
• Cross-sector partnerships are enabling new low-carbon technologies and efficiencies. Examples include vehicle-to-grid (V2G) projects by Enel and Nissan in the UK and Denmark, and a hybrid-electric flight demonstrator developed by Siemens, Airbus, and Rolls-Royce planned for flight in 2020.
• Sustainable value chain initiatives are targeting high-emission sectors like land use and agriculture. The Tropical Forest Alliance 2020 (TFA 2020) works to end commodity-driven deforestation by 2020, while the Global Battery Alliance aims to create a sustainable battery value chain by eliminating child labour and reducing pollution from materials like cobalt and lithium.
• The 'Fourth Industrial Revolution' technologies, specifically AI and IoT, offer significant emission reduction potential. Microsoft's $50 million 'Artificial Intelligence for Earth' project applies AI to water and biodiversity management, while Ericsson uses connected sensors to monitor and restore mangrove forests in Malaysia.
• Private finance is shifting toward low-carbon assets through green bonds and climate-aligned portfolios. By 2017, 'climate aligned bonds' reached approximately $895 billion. Specific examples include ENGIE becoming the world's largest issuer with €5.25 billion in green bonds and Fiji issuing a $50 million sovereign green bond for environmental and social projects.

APA

World Economic Forum (2018). Two Degrees of Transformation. http://www3.weforum.org/docs/WEF_Two_Degrees_of_Transformation.pdf

Chicago

World Economic Forum. Two Degrees of Transformation. 2018. http://www3.weforum.org/docs/WEF_Two_Degrees_of_Transformation.pdf.

Wikipedia

{{cite report |author=World Economic Forum |title=Two Degrees of Transformation |date=January 2018 |url=http://www3.weforum.org/docs/WEF_Two_Degrees_of_Transformation.pdf |access-date=23 October 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{worldeconomicforum2018two, author = {{World Economic Forum}}, title = {{Two Degrees of Transformation}}, institution = {World Economic Forum}, year = {2018}, month = jan, url = {http://www3.weforum.org/docs/WEF_Two_Degrees_of_Transformation.pdf}, urldate = {2026-10-23}, note = {Indexed by Climate Insights Directory} }