Leading through action: driving change through climate resilience
The annual United Nations Climate Change Conference of the Parties (COP) has evolved into a familiar pattern. The build-up to each conference is often described as ‘the last best chance’ to stop climate change – instilling a sense of urgency in the talks. The conferences run beyond the scheduled finish dates and talks continue late into the night. And finally, leaders settle upon a hard-won agreement which both delights and disappoints in equal measure.
COP-27, held in November in Egypt was no exception to this accustomed pattern. As the dust settles and the details of the agreement continue to be scrutinised and analysed, the question is, what next?
A big win for adaptation
The decision to set up a loss and damage fund was a landmark moment. Over 30 years in the making, it may not be perfect, but the agreement establishes the principle that rich nations who have economically benefited from carbon emissions will compensate poorer nations who endure some of the worst climate impact. This meant that the main headline from the COP was about how globally we adapt to the impacts of climate change.
A shift away from climate mitigation
The lack of progress on mitigation was considered a failure of the negotiations. And with no further commitment to reducing emissions and the change of language around fossil fuels to “low emission and renewable energy,” the phasing out of oil, gas, and coal appears to have fallen down the list of priorities. Overall, the message from COP-27 marked a shift from mitigation and prevention of climate impact – to dealing with the consequences of emissions down the line.
So where does this leave energy transition and how should businesses respond? The answer depends on location. Countries that commit to leading the way in their climate response, including the UK, will set the pace of emissions reduction. However businesses also need to be ready to respond to the impact of climate change faster than they may have been prepared for to date.
Creating climate leadership
Leading organisations will take a holistic approach to climate resilience and ensure they are prepared for the impact if global negotiations continue to stall. We believe there are three ways that organisations can stand out as climate leaders:
- Focus on adaptation: With an increasing risk that the 1.5°C temperature threshold will be exceeded in the next few years, leaders should understand how this changes their exposure to climate impacts and what it means for their business. Early understanding and mitigation of climate-related risks should become a routine part of business governance to reduce the financial expense in the future.
- Deliver emission reduction: Commitment to net-zero by 2050, or earlier, is a prerequisite for becoming a climate leader. What is lacking in global leadership can, in part, be compensated for by responsible businesses who make the right decisions for people and the planet and take action to reduce fossil fuel use and minimise their own greenhouse gas emissions.
- Drive change through supply chain and customers: Many organisations make an environmental impact through the goods and services they buy. Integrating sustainability into purchasing decisions and managing sustainability risks in procurement processes will ultimately reduce organisation’s exposure to risks, both reputational, environmental and financial.
While COP-27 missed valuable opportunities to discuss mitigation and the phasing out of fossil fuels, businesses can be climate leaders to lead the charge with driving positive change. This starts with scrutinising business governance – and seeking out new opportunities to improve existing requirements.