At COP26, the global community made meaningful progress. Unfortunately, it also is wholly insufficient to meet the Paris Agreement’s goals.
National 2030 targets announced in Glasgow take us to 2.4°C of warming by 2100, a noticeable improvement from our path six years ago in Paris, but these are still very far from the objectives of the Paris Agreement. The stretch target of 1.5°C, which the UK hosts aimed to keep alive, is now on life support.
That is why the Glasgow Climate Pact asks countries to strengthen commitments by the end of next year, in 2022, instead of waiting until 2025. It also calls on countries to accelerate “the phasedown of unabated coal power and phase-out of inefficient fossil fuel subsidies.” The UN outcome also enabled countries to apply carbon credits to their national targets and to have credits flow across international borders.
International cooperation was not limited to the official negotiations.
- Over 100 countries joined the Global Methane Pledge to reduce global methane emissions by at least 30 percent below 2020 levels by 2030. Conspicuously absent, however, were the largest methane emitters: China, India, and Russia.
- In one of several nature-related announcements, 140 leaders whose countries account for 90 percent of global forests joined the Glasgow Leaders’ Declaration on Forests and Land Use to work collectively to “halt and reverse forest loss and land degradation by 2030.”
- A disappointing 40 Ministers supported the Global Coal to Clean Power Transition Statement to transition away from unabated coal power generation. This group did not include some of the major producers and consumers of coal.
- The US and China issued a joint declaration, making climate a rare issue of cooperation between the two largest emitters.
COP26 also clearly showed how climate action has become mainstream business. 100 pavilions inside the official site and many parallel conferences outside of it produced announcement after announcement. Future COPs will be more trade fair than international negotiation. Among the highlights:
- The formation of the International Sustainability Standards Board, which will consolidate the Value Reporting Foundation (VRF) and the Climate Disclosure Standards Board (CDSB), is a major breakthrough for unified ESG reporting.
- The First Movers Coalition will gather companies to use their purchasing power to create early markets for innovative clean energy technologies in industries whose emissions are hard to abate.
- The Glasgow Financial Alliance for Net Zero, an umbrella initiative grounded in the UN’s Race to Zero criteria, includes 450 financial services firms managing US$130 trillion of private capital.
- A multistakeholder COP26 declaration accelerated the transition to 100 percent zero-emission light vehicles.
At COP26, BSR launched or co-launched several collaborative efforts to build the net-zero economy, including:
- A free online training course for SMEs called “Climate Fit,” part of a set of tools that SMEs can freely access on the SME Climate Hub, which was developed with CISL.
- A 1.5°C Supplier Engagement Guide for the 1.5°C Supply Chain Leaders, a group of companies making climate a key procurement criterion. The guide is an open framework available to any company, with clear steps and an open/evolving repository of best practices shared by leading companies.
- The Business Alliance to Scale Climate Solutions, a group of corporate funders and partners dedicated to increasing the scale and impact of carbon credits and other forms of climate solutions funding. BASCS is now open for new members!
- The Sustainable Freight Buyers Alliance, which will be incubated over the coming six months and aims to achieve 100 million tonnes of reductions in freight and logistics emissions this decade and to contribute to 1.5°C-aligned net-zero logistics by no later than 2050.
Finally, COP26 evidenced several trends which will intensify in coming years.
Net-zero commitments are here to stay. The release of the Science-Based Targets initiative’s Net Zero Standard will help to make them more consistent and environmentally integral. But with activists protesting for climate justice and decrying the credibility of those commitments, the main question for business will be how to implement net-zero goals quickly and equitably while benefiting local communities. Businesses will have to get their arms around climate justice.
The connection between climate and nature will become more prominent. Companies will increasingly be asked not only to decarbonize energy, but to look upstream at their impacts on land and materials they source. And there is growing momentum to rapidly reduce methane emissions. For business, this means an expectation to consider not just CO2 but all greenhouse gases in their accounting and their decarbonization strategies, e.g., related to agriculture, waste, and land use.
F. Scott Fitzgerald wrote that the “the test of a first-rate intelligence is the ability to hold two opposing ideas in mind at the same time and still retain the ability to function. One should, for example, be able to see that things are hopeless yet be determined to make them otherwise.” So it was with COP26. The 1.5°C goal, with all the impacts that the IPCC documented in 2018, is slipping away, even as climate action mainstreams into the business community.