A new business case for decarbonization

"Many companies are facing what's in effect a COVID moment."  ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌

Another Decarbonization Bonus: Weathering Fuel Price Shocks By Justin Worland/London Senior Correspondent The Sustainable Markets Initiative (SMI) Roundtables and exhibition 2026. Photo: Ian Jones In 2024, I accompanied Australian mining magnate Andrew Forrest to Las Vegas where he unveiled his company's new electric mining dump truck. At the time, Forrest, the founder and executive chairman of Fortescue, made the case that the new trucks would not only contribute to his goal of eliminating the company's carbon footprint but also cut fuel costs.  This investment was top of mind when I caught up with Forrest this week at the Sustainable Markets Initiative summit in London. In the wake of the U.S. and Israel invading Iran, fuel prices have soared across the globe, driving shortages in some regions and hitting the share price of energy-sensitive industrial companies. In this light, it's clear Forrest's investments have allowed him to do something that a growing number of executives are only now contemplating: use decarbonization not only to cut emissions but also to reduce exposure to violent swings in fuel prices. "If you democratize your energy and bring your cost down to what it should be, which is cost of capital plus maintenance, then you're going to have abundant energy for citizens and shareholders," he told me during a fireside chat. In other words, decentralizing energy production strips away added costs to the benefit of actual end users. In some ways, the annual SMI summit, which this year drew CEOs from around the world, was notable merely for continuing on. Convening CEOs from major American firms like Bank of America and Trane Technologies at an event with sustainability in the title is no easy feat in 2026 amid an accelerating energy crisis and a U.S. administration keen on attacking anything with even a veneer of sustainability.  But the discussions in London actually underscore how the current economic and geopolitical context amplify the business case for sustainable practices. The global benchmark price for crude oil quickly topped $100 per barrel this week as Iran shut down transit through the Strait of Hormuz, a critical thoroughfare for oil leaving the Persian Gulf. The picture is even worse for gas. The spot price for liquified natural gas doubled in parts of Asia, and hard hit factories cut operations in response.  "You're all CEOs, and I'm sure you're sitting around and saying, well now we've been reminded of what we learned in 1973, which is, you need energy independence," John Kerry, the former U.S. Secretary of State and climate envoy turned investor, told the summit's crowd. "You're not safe. There's no security if you are dependent on the Strait of Hormuz or the Red Sea or somewhere else…  it's part of the whole supply chain discussion." In the past, geopolitical conflagrations have been framed as a matter primarily for nation states to address. And, despite the obvious advantages, renewable energy hasn't always won out in challenging moments, as governments have often relied on easier short-term subsidies for existing energy sources to quell consumers and voters. This time around, the volatility is a wake up call for corporate leaders who are newly empowered to do something about it. "Many companies are facing what's in effect a COVID moment—a fundamental breakage in supply chains," said Ron O'Hanley, the CEO of U.S. financial services giant State Street, in a different SMI session. "When we get to the other end of this, nobody is going to leave themselves to be exposed like that." The possibilities for big companies to respond effectively on their own have changed dramatically in the last two decades. The widespread adoption of power purchase agreements has allowed big companies to lock in fixed prices for renewable electricity for decades. Efficiency solutions spurred by the climate and sustainability push over the last two decades—from smart buildings to low-carbon vehicles—have made it easier for companies to quickly realize a return on such investments. And technologies like solar and battery storage have enabled companies to affordably invest in their own power generation. There is perhaps no better example of this approach than Forrest. In addition to the electric mining trucks, he is building Western Australia's largest solar farm to power Fortescue's mining operations. And he has invested in low-carbon fuels to power transport. "With much of the technology in renewable energy now, the genie is fully out of the bottle," Forrest said. "The technology I've seen around batteries... the massive technology increases in the grid because of AI... that's not getting back in the bottle either." Read more here. If you have a minute, please take our quick survey to help us better understand who you are and which business and climate topics interest you most. Take the Survey   Want more from TIME? Sign up for our other newsletters.         Subscribe to TIME TIME may receive compensation for some links to products and services in this email. 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