Around this time last month, I was holding the hottest ticket in town, the blue badge to attend the climate negotiations in Glasgow.
For the first time ever, we saw governments and businesses attend in almost in equal numbers. This year’s event was the largest ever held in its history, with 39,000 registered attendees including former US President Barack Obama, as well as celebrities, artists, musicians and authors. In attendance were also multiple companies - who are not formally part of COP meetings – to show how businesses have been leading the way on climate action and indicating that it’s high time that governments catch up.
Indeed, if we were to look at the flood of pledges before and during COP26, we’d all believe that the pace of corporate climate action is accelerating. Except it’s not.
Behind the marketing materials, these pledges are less promising than they seem. Just one in five of the G20-based companies which have set emissions-cutting goals have aligned them with keeping temperatures to within 1.5°C of pre-industrial levels by 2050, according to the Science Based Targets initiative (SBTi). The latest report from Morgan Stanley Capital International said that companies’ current emissions plans are still putting the globe on track for warming of 3°C.
Should I read another headline, from a website or company that claims it is certified for unfounded commitments without an action plan, I’m going to turn into a She Hulk – which conveniently fits in with corporate messaging about climate change, what with her being green and cool.
But how do corporates move beyond “commitments” to “action”?
One very important tool and solution is to link senior management pay to sustainability targets. Here’s a good read from FT explaining that idea. Another is to internalise the impact of supply chains within your business and account for those alongside dependencies and demonstrate how to lead, by choosing to prioritise Scope 3 emissions or even Scope 4, meaning to avoid emissions altogether.
Perhaps, in reality, these kinds of suggestions seem a bit too extreme for some. But the unvarnished truth is that unless we put a roadmap behind the commitments, our world will continue to burn up.
But it is not all bad news. Climate action is an investment, not a cost, meaning that there are short to medium-term returns from a brand equity perspective, as people are really looking for companies that they trust.
One of the big insights from COP, listening to Greta Thunberg and many from her generation is whilst companies are increasingly looking for purpose, people are actually looking for trust. They are actively looking to buy from companies that manage to coherently substantiate their actions through cohesive storytelling, underpinned by facts and therefore they can trust.
So What Has COP26 Achieved?
The first thing to note is that The Glasgow Climate Pact resolved ‘to pursue efforts to limit the temperature increase to 1.5°C’ and ‘recognises that limiting global warming to 1.5°C requires rapid, deep, and sustained reductions in global greenhouse gas emissions.’ But this is still not an official target.
Under Article 6 of the Paris Climate Agreement, countries can work across borders to meet their climate goals. A country that has surpassed its climate target can do carbon offsets like restoring forests to balance out greenhouse gases. But these tools are only as good as their accounting, and figuring out the right balance of transparency and flexibility has proven to be an immensely difficult task. Many vulnerable countries also argue such mechanisms end up being a way for polluters to stall instead of making emissions cuts.
On a positive note, Article 6 is being re-written, creating rules to prevent double-counting of emissions credits, close loopholes, add stronger language, and make credits being traded across borders represent real reductions in greenhouse gas emissions. Countries will also have to take a detailed inventory of their greenhouse gas emissions by 2024, which will be used as the basis for future emissions cuts.
“As uncomfortable as we all are with the text, as imperfect as it is, it does bring sufficient enough balance for us to move forward, and it does provide us with the best chance at this time to keep 1.5°C alive,” said Grenada’s Minister for Climate Resilience Simon Stiell.
Cutting Methane Emissions
A potent greenhouse gas that leaks out of natural gas pipes, Methane belches out of cows, and seeps out from landfills, ultimately trapping about 30 times as much heat as carbon dioxide over 100 years. Which means cutting methane has swift and sweeping climate benefits.
More than 100 countries, responsible for half of global methane emissions, signed the Global Methane Pledge to cut their methane emissions by 30 percent by 2030. Signatories include the US, the European Union, and Japan. However, some of the largest emitters like China, Russia and India haven’t committed to that pledge making progress in this area slower than it could be.
Phasing Out Coal
Likewise, with coal. For the first time at a COP event, more than 40 countries committed to ending their domestic use of coal for electricity, and 25 countries agreed to stop financing coal power in developing countries. Coal-fired power plants produce one-third of global greenhouse gas emissions and coal usage is responsible for 40 percent of annual CO2 emissions, but China, India, the US, and Australia — comprising more than two-thirds of global coal consumption — did not agree to a domestic coal phase-out.
Ending Oil and Gas Production
Many discussions focused on the burning of fossil fuels, but a new programme at COP26 targets their extraction in the first place. The Beyond Oil and Gas Alliance, launched by Costa Rica and Denmark, commits country members to phasing out new licenses for oil and gas production. Members, which currently include France, Greenland, Ireland, Quebec, Sweden, and Wales, must also set a date for ending oil and gas production in line with the Paris agreement.
“Fossil fuel demand is decreasing, and supply needs to adjust,” said Christiana Figueres, one of the lead negotiators of the Paris agreement, in a statement. “That’s why I’m so pleased to see such a diverse group of governments launching the Beyond Oil & Gas Alliance to take decisive action to phase out oil and gas production.”
The pledge from the conference has helped put more long-term climate goals in place, but in the near term, it doesn’t provide concrete solutions.
The Glasgow pact called for countries to come back to the table next year with stronger and more detailed plans for cutting their emissions by the end of the decade and by the middle of the century. But the bottom line is, what matters is the actions that countries take to make their commitments real — not just in terms of reducing emissions, but also restoring ecosystems, switching to clean energy, and addressing the historic injustices around climate change.
Reflecting on the task ahead, COP26 President Alok Sharma said: “We can now say with credibility that we have kept 1.5°C degrees alive. But its pulse is weak and it will only survive if we keep our promises and translate commitments into rapid action. I am grateful to the UNFCCC for working with us to deliver a successful COP26.”
“From here, we must now move forward together and deliver on the expectations set out in the Glasgow Climate Pact, and close the vast gap which remains. Because as Prime Minister Mia Mottley told us at the start of this conference, for Barbados and other small island states, ‘two degrees is a death sentence’.
It is up to all of us to sustain our lodestar of keeping 1.5 degrees within reach and to continue our efforts to get finance flowing and boost adaptation. After the collective dedication which has delivered the Glasgow Climate Pact, our work here cannot be wasted.”
Climate actions can have a large number of positive effects, providing co-benefits to society. It is estimated, for example, that reducing air pollution could avoid between 0.6 to 6.5 million premature deaths annually, and reduce the burden of associated healthcare costs forecasted to be £130 billion. Climate actions and policies can also lead to increased employment, productivity, energy efficiency, and agricultural yields.
The transition to net-zero requires new jobs in renewable energies but also in most other sectors. The London School of Economics reports that a many as 4.2 new jobs could be created for every new “green” job. Environmental regulations necessary to achieve net-zero can enhance productivity by stimulating innovation but also by other means such as improving the health and living conditions of people and making gains in efficiency throughout all systems.
In terms of agriculture, reducing air pollution — which is harmful to crops as well as humans — can considerably improve yields.
The value of these parallel benefits often equals or exceeds the cost of climate actions. For the last 40 years, people like John Elkington and Jonathon Porritt and many many others have been saying that sustainability is an investment, not a cost — perhaps it's time that we listen.