4 Key Business Insights From COP27

As we reflect on COP27’s outcomes it is clear, that we are still on the pathway to a 2.5-2.9C world with enormous implications for society and the economy that serves it. Put simply, this is not a future we can accept. Against this difficult backdrop, business with its capacity to innovate and scale positive solutions has an ever more important role to play in enabling a better future for all. So, what can businesses take away from COP27?

1.??????This is the decade when good intent needs to become urgent action

The run up to COP26 saw a blizzard of corporate commitments to become Net Zero. But a year on the Net Zero Tracker has looked at the Net Zero plans of 2,000 of the world’s largest publicly traded companies and found, just one third (up by 20% in 2020) have a Net Zero goal. Of these, 65% don’t have robust plans in place to deliver them. Ranging from Scopes 1, 2, and crucially 3 emissions explaining how they will use carbon offsets, bearing in mind the Science Based Targets Initiative has stipulated that no more than 10% of today’s footprint should ultimately be offset and intermediate decarbonization goals. ?Similarly, according to a study from Microsoft and Dr Chris Brauer, Goldsmiths, University of London , only 41%?of UK organisations are currently on track to meet the government’s targets for net zero emissions by 2050.

The High-Level Expert Group on Net Zero Emissions Commitments of Non-State Entities report launched at COP27. It set out 10 clear recommendations for credible corporate Net Zero plans. Companies should expect to be held to account by the Net Zero tracker and many others against them.

Microsoft’s Sustainability Cloud allows companies across their extended global value chains and the 1,000s of participants in them, to deliver granular planning, implementation, governance, and reporting so they can respond to this scrutiny and demonstrate they are turning ambition into action.

2.??????We will only create a Net Zero future if we take people with us

People are starting to become much more central to the Net Zero narrative. So much of COP27 was dominated by issues of compensation for loss and damage, gender, and a just transition. As Bruno Rodriguez, Argentine youth activist said in a statement to UN News on Loss and Damage negotiations ‘this is an issue that has been put aside COP after COP. The fact that we are in an African country this year is very significant. It is a scientific fact that countries with the least economic resources and with barely any responsibility for emissions are the ones that end up suffering the most... It is about reparation and social justice.”

Corporate Net Zero plans need to reflect this too and committing to making people’s lives better today (healthier, happier, safer, less polluted, new skills and better jobs) not just cutting emissions in distant places, decades from now.

Not only is this the principled thing to do, its also pragmatically the way to secure societal support for the huge changes that are needed in our lives in the near future. Microsoft’s new report, Closing the Sustainability Gap , shows how companies will have to provide their people with the skills to do every job (from procurement to marketing, finance to product development) in a low carbon way to provide them with purposeful and future proofed careers.

3.??????The Food Sector is at the epicentre of the Climate Crisis

Previous COPs have majored on decarbonizing our energy and mobility systems. However, the food system has largely been ignored despite it being existential to societal wellbeing and stability. The food sector is the biggest single source of GHGs; uniquely vulnerable to the weather extremes (heat, drought, flood) that emissions are contributing to; and uniquely hard to decarbonize, due to there being millions of points of production; 100s of millions of producers, billions of consumers, trillions of items of food and drink consumed. COP27 had a welcome focus on food throughout the agenda from food waste, land use change, deforestation, methane emissions and alternative proteins. ?Microsoft’s commitment to build a Planetary Computer is starting to give us the datapoints to understand how nature, our biggest and most important ‘food factory’, is buckling under the strain of the climate crisis. This technology will also help us identify, prioritise and track the solutions we need to regenerate it.

4.??????You cannot manage what you cannot measure.

Think about these statistics for the food sector – millions, billions, and trillions. Now imagine trying to track, trace, baseline and improve its carbon footprint with a pen, paper and spreadsheet!?With AI, Big Data, Farmtech, Remote sensing etc, we can start to solve this immense challenge. From high resolution satellites tracking 70,000 methane sources across the world to Microsoft investing in climate data scientists in the Global South through the opening of new AI for Good Labs in Nairobi and Cairo. It is a stark fact that for every data scientist in Africa there are 14 in the Global North and COP27 began to turn the potential of data/digital to build a Net Zero future into reality. Companies need to make data and digital solutions central to their climate plans.

COP27 is a reminder that tackling the climate crisis will only become more central to corporate success in the future. Whatever your view on the policy outcomes, the science is heading in only one direction. The impact of extreme weather on lives and livelihoods is ever clearer, making the desire for a bold and credible business response more vital and the importance of technology and data on turning the tide against climate change more obvious.?

Produced in partnership with Musidora Jorgensen, Chief Sustainability Officer, Microsoft UK

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