This paper shows opportunities to spur ambition loops in countries and sectors around the world. It outlines the types of signals coming from business and government to increase ambition. Leadership from each, pushes and enables the other to do more. Business leadership can support bold government policies, which in turn unlock further business action.

This research paper illustrates where leadership is creating opportunities to build ambition loops in key sectors around the world. It points to the growing number of businesses demonstrating leadership on climate and explores examples of policies that governments have used to spur greater action in the business community. These are meant to inspire and inform deeper dialogues between governments and leading businesses that result in the development and acceleration of more ambition loops in key sectors.

The first part of this paper explores what it takes to create an ambition loop and for governments to find private sector partners that will help advance a country’s climate and development priorities. Ambition loops depend on policies that create clarity and confidence. They unlock further investment from investors and companies, accelerating progress toward countries’ climate and development goals. Policies that add clarity and build confidence are critical to driving action across the private sector, providing the right incentives to move all companies toward a zero-carbon future.

The paper then looks at emerging business leadership in electric power, transportation, and land and forests, with examples of policies that countries have implemented to drive action. These examples highlight the potential to harness business leadership to create ambition loops. These offer important proof that can inspire other countries to emphasise clarity and confidence in their own policy making. Examples include bold renewable energy targets in India and clear rules for power purchase agreements in Europe, mandates and incentives for electric vehicles in Norway and California, clear financing for electric buses in China, and new partnerships for transparency in cocoa supply chains in Ghana and Cote d’Ivoire. Explicit and ambitious time-bound commitments to “zeros and 100s” provide an ultimate level of clarity and confidence. For example, some companies are setting dates to phase out coal-fired power or ban sales of internal-combustion-engine vehicles.

The paper concludes with a set of priories for inspiring and accelerating ambition loops, specifically with stronger Nationally Determined Contributions (NDCs) by 2020 and long-term strategies for 2050 that boost clarity and confidence. Effective policies are needed to accelerate action to the pace and scale necessary to meet the objectives of the Paris Agreement and Sustainable Development Goals. Creating ambition loops must be a central part of efforts over the next two years to advance bold domestic policies; strengthen Nationally Determined Contributions; and develop long-term, deep decarbonisation strategies that create the clarity and confidence needed for significant investments from the private sector.

1. Together leaders can advance toward a zero-emissions future through the following means: Ambitious national policies and plans; strengthened nationally determined contributions (NDCs) by 2020; and clear, long-term 2050 deep decarbonisation strategies.
2. Business leaders and governments are poised to go further and faster with policies that add clarity, with specific or streamlined rules and timelines, and accessible, consistent information and enforcement mechanisms. In addition, the policies should build confidence, with strong market signals, regulatory certainty, firm long-term strategies, predictability, and supportive infrastructure investments.
3. Ambition loops exist for the power industry which has a major role to play in renewable energy, energy efficient buildings, and clean transportation solutions. This industry is stepping up with more commitments than any other sector in countries such as India, Brazil, Colombia and Japan. Nearly half of the Fortune 500 companies have set clean energy targets or greenhouse gas reduction goals. 190 countries captured US$3.7 billion in savings from greenhouse gas emission reduction measures in 2016.
4. Ambition loops exist for the transportation industry as low carbon transport is a US$28 billion market today, and will grow to a US$8 trillion market by 2050. This sector is particularly active with commitments in major markets such as the United States, Japan, United Kingdom, Germany and China.
5. The food and beverage industry has a major role to play in multiple solution areas (agriculture, water, energy, transportation, and health) and is the most active sector in the United States, Mexico, Norway, Nigeria, Denmark, and Bangladesh. Seven of the world's 10 largest food and beverage companies have committed to setting Science Based Targets to reduce greenhouse gas emissions.
6. Ambition loops relating to land and forests are less mature than those in other sectors, but the opportunity is immense. Companies that are supporting net-zero deforestation and landscape restoration suggest potential ambition loops that can accelerate investments in support of sustainable livelihoods, transparency, and resilient supply chains.
7. Achieving the objectives of the Paris Agreement and Sustainable Development Goals will require businesses and governments to step up their ambition. They will need strategies and policies to close the gap between existing plans and the pace and scale of investment needed to limit global warming to 1.5 degrees Celsius.
8. Businesses and investors are actively looking for signals from governments on how they plan to address climate change and what this will mean for tomorrow's market opportunities.
9. Priorities for the European Union (EU) to unlock private sector investment in climate solutions include: a long-term target for greenhouse gas emissions reductions for 2050, and targets for the short and medium term that guide the transition to a low-carbon economy; ambitious emission reduction targets in line with scientific evidence; clear, credible, and long-term policy frameworks will provide the confidence needed to deliver the required shift in investment for a low-carbon economy. These three priorities are essential to provide investors with clarity and confidence about the future direction of climate policy.