In the early hours of Sunday morning, a “fragile win” for the climate was declared as the Glasgow Climate Pact was agreed to at COP26, however not all hope was lost! Significant achievements were made on coal, deforestation, and carbon trading, and a major shift in momentum presents business with big opportunities!
In this blog, we take you through the biggest implications for businesses post COP26, offering actionable steps forward, so you can create meaning from the event, no matter where you’re at in your carbon reduction journey.
COP26: Some good, some bad & some ugly
Heralded by many as the global community’s last chance at keeping 1.5°C of global warming within reach, there was an enormous amount riding on the 26th UNFCCC Conference of the Parties in Glasgow. With the conference wrapping up over the weekend, the question now understandably on everyone’s lips is ‘was this achieved?’ The answer: yes, but only just.
Put frankly, the conference didn’t achieve all it set out to. Namely, it didn’t see the increased ambition from all countries needed to align their national targets with 1.5°C. Instead, combined 2030 commitments after the conference are still placing us at a best estimate of 2.4°C. While this is nowhere near what was needed, all is not lost, as countries have committed to reviewing and increasing their 2030 targets ahead of next year's COP27 which still keeps the door for 1.5°C slightly ajar.
1.5°C: “Bruised, battered, but alive”
While it would be remiss to celebrate COP26 as a major success, there is certainly still cause for cautious optimism. Notably, a number of major achievements shouldn’t be overlooked:
- 141 countries, including Australia and Brazil, agreed to protect forests and end deforestation by 2030, as well as provide US$12 billion for forest-related climate finance.
- With pledges made at the conference, 90% of the world’s GDP is now attached to countries with strategies to achieve net zero by mid century.
- A major agreement was forged between China & the United States, representing some 40% of global emissions, to cooperate closely on strong emissions reduction in the next 10 years.
- A fundamental part of the Paris Agreement on carbon trading was finalised, potentially unlocking trillions of dollars in climate finance to assist companies and countries mobilise the energy transition.
Most notably though, was a unanimous shift in rhetoric and focus to 1.5°C. The importance of this decisive shift, thanks in large part to the dedicated advocacy of global activists, should not be downplayed. Global agenda-setting events like COP send clear signals to the rest of the world, particularly economic signals to business and investors. And while 1.5°C has been the rallying cry of scientific and environmental movements for a long time, for it to be adopted at this high level is significant.
Post COP26: implications for business
So where does all this leave the business community? What’s been made abundantly clear is that the transition to net zero is on a path of no return, and it’s gaining major momentum in the next few years.
With an urgent increase in 2030 ambition built into this year’s pact, momentum between now and COP27 in Egypt will likely be the most intense we’ve ever seen. This means the next 12 months present an unbelievably fertile window for businesses to participate in the acceleration, no matter where they currently are in their transition journeys.
The risks of not doing so have never been more pronounced. As we highlighted in the lead up to the conference, companies without a clear plan to not just adapt, but actively contribute to a low carbon economy face the prospect of exposing themselves to a raft of incoming legislative, financial and cultural impediments like poor credit ratings and losing ambitious, conscious young talent.
Additionally, if there was ever even the slightest bit of concern that communicating your climate impact could be seen as overly political and thus too risky, COP26 has shown that time has now well and truly passed. While the game play in federal politics will likely continue through to the next election, business should not be deterred. If anything, they should be emboldened by the fact that they are part of the global, proactive majority, including the Business Council of Australia, who recognise both the social importance and economic opportunities of being part of the solution.
Tips for businesses
More than any other previous conference, COP26 has established that there’s no argument on the science, and that governments, business and the global community alike are in strong agreement on the need to keep within 1.5°C. There’s never been a time like now for you and your business to get involved:
- You can’t manage what you can’t measure, so if you’re not already, take steps to start measuring and reducing your business’ impact. This should include efforts not just to reduce your own business’ emissions, but those associated with your entire value chain.
- Increasingly so, these targets will need to be science-based. COP26’s strong focus on 1.5°C has further driven the need for targets to be deeply rooted in the best available climate science, not just lose unmeasurable goals. The Science-based Targets Initiatives is a great place to find out more about this.
- Importantly, don’t keep these results to yourself and be sure to clearly communicate your impact with your customers, investors and community. Carbon related disclosure was supercharged at COP26, so companies who either avoid or fail to communicate their position will likely lose out to those who do.
- Leverage expertise from business focused decarbonisation coalitions. Groups like Net Zero Asset managers and the We Mean Business coalition provide great insights and guidance on how businesses can capitalise on this unique period of economic growth.
Undoubtedly, COP26 has presented a unique set of business opportunities and risks. Adaptation to these factors has never been more paramount. Pathzero’s digital platform ensures your business is able to easily yet credibly meet the current and emerging corporate climate requirements by uniquely combining access to the online tools and sustainability expertise your business needs to surface and address its carbon emissions.
Schedule a demo with our team to learn more about the Pathzero platform, and discuss the climate actions and journey of your organisation.