COP27: What the Results Mean for Business

COP27 came to a close with headlines spotlighting the historic decision to establish a loss and damage fund. However at the same time we’ve seen a lack of targeted focus on proactive international action to wean nations off fossil fuels. Commentators noted that this was far from surprising given there were more oil lobbyists in attendance than people from communities affected by the climate crisis.

Before the summit began, climate activist Greta Thunberg labelled the event greenwashing, “designed in a way which encourages countries and world leaders to cheat and use loopholes to benefit themselves”. With UN General Secretary António Guterres also declaring us on a “highway to climate hell”, the conference had a lot to prove.

There was controversy back home of course when Rishi Sunak made a major U-turn, with many led to believe he only attended due to fear he’d be shown up by his predecessor Boris Johnson who said to his audience “now is not the time to go wibbly-wobbly on net zero”. The removal of ?the COP26 President, Alok Sharma, and the Climate Minister, Graham Stuart from the new Cabinet, raised concerns that climate commitments could be superseded by near term policies to address cost of living. On his return to Parliament he agreed it’s “morally right” that Britain honours its climate change commitments but argued reparations are “not the right approach”.

Even with the backdrop of ?controversy, some notable mentions from the COP include the number of nations committed to reducing methane emissions by 30% this decade rising to 150, and Brazil’s new President Lula reinforcing Brazil’s commitment to undo damage done to the Amazon. The 1.5C commitment remained a limit under the 2015 Paris Agreement, though countries clashed on whether this should be the target.

However, the loss and damage fund stole the headlines. Details still need to be hashed out, and there were no decisions on who should pay, where the money will come from and which countries will benefit. What we can say though is that there will be opportunities for businesses as the fund opens up and gives licence to bolster climate adaptation and resilience programmes. Coupled with investment pressures to explore these new markets there’s opportunity to drive the infrastructure development for renewable energy and other necessary projects.

It becomes clearer that business and civil society are critical in driving forward practical change and innovative system solutions, and while governments are looking inward or are unable to reach meaningful global agreement. Within the UK, there is a relatively strong legislative platform – including areas like the Environment Act and a net zero target – but bolder solutions are needed to break out of the minutia of debating consultations around single-use plastic thinking. For real leadership, progress needs to be faster and more tangible.

What should businesses take from COP27?

Firstly businesses have an imperative to continue driving this change. On net zero the UN has announced recommendations for businesses, financial firms, cities, and regions to ensure they set credible net zero goals and roadmaps. Businesses should familiarise themselves with the new recommendations and identify gaps in their own strategies. The stark warnings from experts at COP explicitly point towards a higher than 2 degree warming future, therefore more work is still to be done to remain within the 1.5 degree limit. Despite the blocks from petrostates on bold text on fossil fuel reliance, many investors will be heeding the direction of travel?towards phasing out of fossil fuels.

Secondly some 81% of UK adults agree we’re heading for environmental disaster unless we change our habits quickly, up from 59% in 2013. Clearly, consumers care and want to do more. Behaviour change creates small simple steps in the right direction, where through simple campaigns businesses can help their consumers reduce their impact on the environment, save money, and move society in a more circular and positive direction.

COP28 will take place in Dubai. The loss and damage fund signals a major agreement being reached and subsequently we can expect other agreements, such as that to phase out fossil-fuels, coming down the line with pressure from investors to act quick and think smart. We encourage businesses to think about what they can achieve in this time, and how we can start demanding more of these summits and our global leaders. We work with a number of businesses that are working to deliver on their ESG targets in the knowledge that this will benefit both the planet and help to recruit the best young talent to want to work with responsible businesses. If you want to find out more, contact [email protected]