From Copenhagen to Dubai and next to Amazon…. A journey that matters!

In 2009 when I attended COP15 in Copenhagen, it was a summit not just of nations but of hopes and fears. Like a climactic scene in a global drama, over 190 countries painted a vibrant tableau of unity, each bringing to the table their own stories, struggles, and aspirations. COP15 wasn't just a meeting; it was the world's plea against an encroaching climate crisis.

Fast forward to COP28 in Dubai, a new chapter in climate action was written. The “UAE Consensus ” signaled a transformative stance on the world stage. COP28 wasn't just a conference; it was a testament to change, a symbol of a world pivoting towards a sustainable future.

The discussions and commitments forged in the latest edition of this global summit illuminate the critical role of corporate decision-makers in navigating the complex tapestry of climate change. This new era calls for a renaissance in boardroom conversations;? this transformative epoch is not just about governance, it's about legacy. It's about steering the corporate ship through uncharted waters, where the decisions made today will ripple across generations. In the grand narrative of climate action, boardrooms are not just settings; they are catalysts, the forerunners leading the charge to make things right.

This involves scrutinizing the resilience of their business models in the face of both orderly and disorderly transitions to a net-zero emissions economy. The key question is not just whether we have prepared for these scenarios, but also how confidently we can assert that our strategies are comprehensive and forward-looking. Boards need to consider potential transformations in business models to ensure continued profitability, capital accessibility, and asset valuation under varying climate change projections. This strategic foresight is crucial for staying ahead in an increasingly scrutinized market.

Revamping Governance for Enhanced Climate Responsiveness

In response to the dynamic shifts in both regulatory demands and investor expectations regarding climate change, it's essential for companies to conduct a comprehensive assessment of their governance structures. This should aim at achieving alignment across all levels of the organization - from the boardroom to management teams. The focus shouldn't just be on appraising current frameworks, but also on innovatively adapting them to be more responsive and effective for stronger climate governance. Here’s an easy question to start with, “Do we have the right skillset in the boardroom to ensure compliance, accountability, and climate leadership?”

Emphasizing Diversity and Stewardship in Board Composition

In building resilience and adaptability, incorporating diverse perspectives within the board is paramount. Diversity in terms of expertise, experience, and viewpoints is invaluable in addressing the multifaceted challenges posed by climate change. Boards need members who can bring different insights and approaches to the table, ensuring a comprehensive and effective response to these challenges. The question then becomes, “Does our board composition reflect the diverse and dynamic stewardship needed to navigate the complexities of today's climate and nature challenges?”

Developments you should follow…

• Despite the criticism of lacking bold actions, the gradual shift from fossil fuels to renewable energy sources has never been more pronounced. COP28's commitment to tripling renewable energy capacity and doubling energy efficiency by 2030 presents a clear directive for boards. It's not just an environmental imperative but a strategic business consideration. The transition to renewable energy, now bolstered by governmental support and potential policy shifts, must be a key element in corporate strategies. 400+ organizations have pledged to fully transition to renewable energy , offering a robust network for exchanging best practices and collaborative learning. Boards should actively monitor global energy markets and regulatory landscapes to understand how these changes can affect their business operations and investments.
• One of the major outputs of COP28 is the formation of the Taskforce on Net Zero Policy . It underscores the need for robust policy and regulatory frameworks, which are essential for businesses to develop effective transition plans towards net-zero and nature-positive outcomes. The era of voluntary sustainability reporting is evolving into one of mandatory disclosures and heightened accountability. Boards must ensure their companies are not only compliant but also ahead in their transition strategies, utilizing the tools available.
• The intertwining of nature and climate strategies is also a significant shift. The recognition of this interconnectedness at COP28, especially in the context of transforming food systems, opens new avenues and challenges for corporate strategies. Board directors should ensure that nature is integrated into their net-zero strategies, anticipating potential policy changes and stakeholder expectations. The evolving financial landscape, with institutions like GFANZ integrating nature into financial decisions, further emphasizes the need for boards to develop competencies in managing nature-related risks and opportunities.

What’s ahead?

Under the Australian Corporations Act, directors are now explicitly required to consider nature-related risks as part of their duty to act with care and diligence. Additionally, California has recently enacted two climate-related disclosure bills, aimed at meeting investor demands for comprehensive climate-related information, with a particular emphasis on Scope 3 emissions. Such legislative advancements are indicative of a trend that I anticipate will gain momentum in various other jurisdictions.

In addition, the upcoming COP29 in Azerbaijan, set for November 2024, and the United Nations Biodiversity Conference (COP16) in Turkey a month prior, are significant events on the global environmental calendar. However, to me, it's COP30, scheduled to be hosted by Brazil in the Amazon, that presents a particularly momentous occasion. This conference, aside from serving as a critical global stocktake of the progress since the decisions made in Dubai, holds profound symbolic value.

Hosting climate negotiations in the Amazon, a region renowned for its unparalleled biodiversity yet teetering on the brink of irreversible ecological change, underscores the urgency of the situation. The Amazon's location for COP30 not only highlights the environmental concerns but also the rich human diversity it supports, from Indigenous Peoples and local communities to expansive urban populations.

Furthermore, COP30 will be especially noteworthy as it coincides with the 10-year anniversary of the Paris Agreement. This milestone offers a unique opportunity to reflect on a decade of climate action and reinvigorate global efforts towards more ambitious environmental goals. The backdrop of the Amazon will serve as a powerful reminder of what's at stake and the urgent need for concerted, effective action to preserve our planet's most vital ecosystems.?