'COP26 – What to expect and the role of business' By Akhil Abraham, Head of Climate Diplomacy, British High Commission Canberra
This week marks three weeks till COP26, the United Nations Climate Summit that will be hosted by the UK government in Glasgow. COPs (Conference of Parties) have evolved from just closed-door negotiations among government officials to a premier international event drawing in heads of government, business leaders, and civil society actors from around the world.
COP26 will be particularly exceptional - seen as the most important since the Paris Agreement was agreed to in 2015. While there are elements of negotiations to take place, the bulk of the focus will be delivering on the promise of the Paris Agreement. The UK as COP26 President, will make this the “ambition” COP through four key goals:
- Mitigation – Securing global net zero and keeping 1.5 degrees of global warming within reach: Encouraging all actors to set net-zero commitments by mid-century and interim 2030 emissions reduction targets that aligns with the 1.5 degree temperature goal written in the Paris Agreement.
- Adaptation – Urgently adapt to protect communities and natural habitats: Enabling and encouraging countries affected by climate change to build defences, warning systems and resilient infrastructure to avoid loss of homes and livelihoods.
- Finance – Mobilise public and private finance: Making good on the Paris Agreement annual climate finance goal of US$100bn and ensuring every financial decision takes into account climate change, unleashing the trillions in private finance to meet global net zero.
- Collaboration - Work together to accelerate action: Closing off the outstanding elements of the Paris Agreement Rulebook, and accelerating delivery of the Paris Goals through collaboration between governments, businesses and civil society.
The British High Commission and UK Missions across the world are focused on delivering this agenda. If the right targets, plans, and investments are brought to Glasgow, we can make COP26 a success. And this is not just about national governments – bottom-up action is just as important. The positions taken by business, subnational governments, and civil society will be watched.
Driving decarbonisation towards a net-zero emissions world is an economy wide task, which is why we are also focusing on near term sectoral action. COP26 will also have thematic focus on the phase out of unabated coal power and investment in renewables; the acceleration of the deployment of electric vehicles; and preventing deforestation and supporting sustainable agriculture. All of these structural changes will need to be funded, through government and the private sector, with capital increasingly looking to align their portfolios with net-zero pathways. UK Prime Minister Boris Johnson has aptly distilled this COP26 focus to “coal, cars, cash and trees”.
What can businesses do?
Already many businesses are moving - setting their own targets and climate change strategies. It is important these plans align with global benchmarks and are not seen as green-washing.
While each business and sector will be at a different point of their decarbonisation journey, there are credible standards that all should commit to. Joining the UN Race to Zero Campaign, a global coalition of over 6,000 non-state actors committed to keeping 1.5 degrees alive, is the primary ask of business. By joining you commit to credible and verifiable targets (net-zero emission by 2050 or sooner with an aligned interim target) with a promise to develop a credible plan. There are a variety of ways to join depending on the size and sector of your business.
The hard part is of course developing and implementing strategy, with consideration of your direct emissions (Scope 1) and those you’ve purchased, like electricity (Scope 2). To align with our COP26 agenda, the UK is encouraging businesses to set 100% renewable procurement targets and align with the Powering Past Coal Alliance principles. Business should also shift their fleet to electric vehicles by 2030 and join the EV100 campaign. As you consider these changes, in some cases it will already be economic to make the switch. In others there will be a ‘green premium’ in the short-term, but these costs will decrease over time as the demand for cheaper zero emissions products rise. And they need to be weighed against stakeholder and shareholder expectation for credible decarbonisation.
The hardest part is looking at your indirect emissions (scope 3) across your supply chain, from the use of your products to your assets and the investments you make. Addressing these are a forward-looking process, looking at what the sectoral, national and international transition to net-zero looks like and what your business needs to do to thrive. COP26 will provide a good view of what we are looking for. But it also means integrating this risk management process into business strategy. Moving climate from Environmental, Social, and Corporate Governance (ESG) into central board room thinking. This is why for COP26, the UK is encouraging all companies to publicly report in line with the recommendations of the Task Force Climate-Related Financial Disclosure (TCFD). Many jurisdictions, including the UK and other G7 countries, are already moving toward mandatory disclosure regimes. It will soon be just good business sense.
And good business sense is where we see the decarbonisation journey taking us. COP26 will be a key political milestone, bringing together the right actors to drive change. The end goal is a net-zero global economy, one that has effectively implemented and priced the transition that is underway, so that climate action is an integrated part of decision making.
The British High Commission will be part of this journey, driving climate action and clean economic growth opportunities. If your organisation is interested in connecting on this agenda, please do get in touch. For more information on COP26 do read our COP26 Explained document.
By Akhil Abraham, Head of Climate Diplomacy, British High Commission Canberra