Also: WeWork's bankruptcy, Toyota's $8B investment, Alibaba's booming cloud. 
Good morning, Peter Vanham here in Geneva, filling in for Alan.
With All Hallows’ Eve behind us, it’s November, and that means the latest UN Climate Summit is around the corner, starting at the end of this month in Dubai. The conference is meant to herald a new era of climate action, but the ghouls of a fossil fuel past will continue to haunt the world long into the future, the “We Mean Business Coalition,” a group of organizations and companies committed to corporate climate action, said yesterday.
As it stands, some 30% of global businesses still expect to rely on fossil fuels well into the 2050s, the coalition’s survey of some 250 business leaders found. That’s despite the vast majority of those surveyed aiming for “net zero” emissions by 2050 or before.
That finding is no surprise for those of us in the weeds of the green energy transition, due to “hard-to-abate” sectors like steel and cement production, aviation, and shipping. Technological, pricing, and supply challenges are preventing the adoption of clean alternatives.
The finding also means that anyone aiming to limit global warming to 1.5 degree Celsius—agreed upon at the 2015 Paris climate summit—must acknowledge that the current approach of multilateral climate diplomacy isn’t working.
“The Paris Agreement has been catalytic for global climate action,” Katherine Dixon, a partner at consulting firm Bain and an author of the report, told me. “But […] the Paris system of [nationally defined contributions] that we are relying on is not enough.”
Instead of countries arguing over emissions goals, she said, a better strategy would be to rely more on commercial innovation and industrial policy. “It is [the] interplay of business innovation, industrial policy, and availability of capital—not emissions targets—that drives change,” she said.
Business leaders acknowledge that the most effective carrots and sticks come from government. In the survey, they placed “regulation” well ahead of investor and customer pressure as the main lever of change.
The take-away? If you’re a business leader, expect more Inflation Reduction Acts and Green Deals in the future. They may not solve every problem posed by the energy transition, but they are almost certain to be a part of any future climate policy equation.
Separately, Rob Lake and Jennifer Tejada, respectively the CEOs of Boulevard and PagerDuty, argue in the latest installment of our CEO Initiative essay series that an iterative, experimental and ethical approach to generative AI can help it become the “most significant technological shift” in decades.
More news below.
Peter Vanham
peter.vanham@fortune.com
@petervanham
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WeWork’s looming bankruptcy
WeWork could file for bankruptcy as soon as next week. The real estate company recently agreed to a seven-day extension on paying back its creditors. Yet WeWork may have some leverage in a bankruptcy process: Landlords may be more willing to make concessions rather than lose a large tenant like WeWork on short notice. Bloomberg
Toyota’s new investment
Toyota will double its investment in its battery and EV plant in North Carolina with an additional $8 billion in spending. The facility will be Toyota’s hub for producing lithium batteries in North America. The company earned $8.4 billion in net income last quarter, three times what it earned this time last year. The Associated Press
Alibaba’s cloud success
Around 80% of China’s tech companies and about half of its AI firms rely on Alibaba’s cloud services, chairman Joe Tsai said at a conference on Tuesday. The e-commerce company is launching the newest version of its “Tongyi Qianwen” model, a generative AI program similar to ChatGPT. Alibaba earlier announced plans to spin off its cloud division as an independent public company by next May. South China Morning Post
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Tech Spend Peaks—AI Priority Mid-market tech spending is at its highest level since pre-pandemic, according to Deloitte Private’s 2023 Mid-market technology trends report. Companies see blurred industry boundaries and competition for AI-skilled talent. Read more
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