How business can help fight climate change and deliver agreements made at COP26
As part of edie's "Business guide to COP26", EY's global vice chair for sustainability Steve Varley outlines how corporates can play a key role during global climate negotiations.
All eyes of the world will be on the UN Climate Change Conference (COP26) in Glasgow this November, but governments alone cannot solve the climate crisis. The role of business will be critical, and public-private partnerships will be essential. Here are four key actions businesses can take to help the world meet its climate change goals.
Understand the role of business in supporting Nationally Determined Contributions
Businesses should collaborate with governments in the countries where they operate to understand the actions required of them to help countries meet their five-year goals as set out by NDCs, the carbon reduction targets set by individual countries to reduce national emissions and adapt to the impacts of climate change, and the long-term goals of the Paris Agreement.
To take meaningful action, businesses that can go beyond net-zero need to accelerate their plans and aim to remove even more carbon from the atmosphere than they emit. Setting science-based targets help businesses reduce emissions with trajectories that align with the latest climate science and work towards becoming carbon negative.
Mobilise capital to finance the green transition
The green transition requires significant financing. Developed market governments are still mobilizing the $100bn they committed to international climate finance as part of the Paris Agreement in 2015. UK Prime Minister Boris Johnson has said that he will call on Western governments to commit even more to climate finance at COP26.
But promised government funding has been slow to materialize. And it will not be enough to meet the challenge – particularly when public finances are stretched thin due to the Covid-19 pandemic. Private capital will be essential to financing the green transition.
Leverage clean technology and innovation
Technological innovation will also be necessary. Public-private collaboration is needed to develop clean technologies quickly and at scale. Government funding and policy incentives can support research and development in clean technology. And the private sector is where these innovations for sustainability will occur – and where new green jobs will be created.
Companies need to ask what their role is in the green technology revolution. What do emerging technologies mean for their business? Will they be a consumer or developer of clean technology, or both?
Measure and report on sustainability
Reporting will also play a crucial role. The European Commission’s Corporate Sustainability Reporting Directive (CSRD) proposal could more than triple the number of companies in the EU required to report on sustainability data. And US President Biden’s International Climate Finance Plan signals the Treasury and US regulatory bodies will focus on improving the reporting of climate-related risks among other climate risk objectives.
Companies need to ask where they are in terms of reporting. What do their customers, shareholders and other stakeholders expect? How can they work with suppliers to improve sustainability across the value chain?
Collaboration is necessary to make COP26 a success
Commerce will be vital in ensuring that the commitments made by governments translate into tangible action at COP26 and beyond. Both public-private and company-to-company collaborations are needed. All companies have a role to play, no matter where they currently are on the green transition. Businesses across sectors need to continue to activate capital, technology and reporting to help the world achieve its climate goals. In doing so, they will also position themselves for green growth in the coming decades.
The Business Guide to COP26
What's happening on each day of the COP26 climate summit this November? How does the COP process work, and what are the desired outcomes? In the final run-up to the talks, edie's definitive business guide to COP26 has you covered.
The 26th United Nations (UN) climate change conference is arguably the most crucial of them all. World leaders will be ramping up national efforts to combat the climate crisis through raised ambitions and decarbonisation roadmaps. And businesses will be expected to lead the charge.
This business guide to COP26, sponsored by EY, breaks down everything you need to know about the sustainability opportunities of COP26. The guide includes a full summary of what we know so far about the talks, who's involved, what's happening on each day, and what your organisation can do to turn the ambitions of COP26 into business actions.
The views reflected in this article are the views of the authors and do not necessarily reflect the views of the global EY organization or its member firms.EY