Can businesses use COP28 as a springboard for climate action?

How is UK Plc approaching the upcoming COP28 climate conference in Dubai? Less than a month out, we hosted a roundtable convening a dozen business leaders to gauge their hopes, concerns and priorities around the global net-zero transition and sustainable development agenda.

Can businesses use COP28 as a springboard for climate action?

Pictured: Expo City, the Dubai venue hosting COP28 from 30 November to 12 December

This article acts as a handy summary of some of the hottest topics discussed at the roundtable, which was hosted in association with Centrica Business Solutions earlier this month.

The roundtable was held under Chatham House rules, giving sustainability professionals from organisations of various sizes and sectors the opportunity to learn more about each other’s COP28 plans and to identify new opportunities for leveraging the momentum around the summit.

The role of business

edie’s publisher Luke Nicholls kicked off the discussion by stating: “It’s never really been harder, with all the external factors and the current geopolitical backdrop in particular – whether it’s the horrific situation out in Gaza right now, or in Ukraine, or the tensions we are seeing between the likes of the US and China.

“Even here in the UK, we have seen rowing back on policies over the past couple of months.

“Will this be the COP that solves it all and aligns all nations to tackle the climate crisis in the space of two weeks? Probably not. But, can business really take this moment and use the momentum around COP to engage more effectively with governments and really take the driver’s seat on climate action and sustainable development?”

Unsurprisingly, the general consensus was that, yes, businesses can and should be doing this.

But opinion was divided on the most impactful course of action.

One speaker in manufacturing said his firm is not sending a team to COP, as their priority focus is the delivery of their decarbonisation plans in the UK and Europe. Another speaker, from a major British infrastructure project, agreed.

This approach was understood by those choosing to attend COP. The role of the private sector, one telecoms leader said, is to “come up with workable solutions, demonstrate they are successful, and scale them”. Another telecoms representative agreed, saying that non-state actors will “do the heavy lifting” in turning global agreements into tangible change locally.

Representatives of organisations that are attending COP28 highlighted opportunities to showcase achievements at fringe events and to either form or further sector-specific or pan-industry collaborations such as those orchestrated by the Race to Zero, Sustainable Markets Initiative and We Mean Business Coalition (WMBC).

While businesses do not get a seat at the negotiations to produce the official COP outcome texts, it was agreed that negotiators and policymakers do look to the private sector for ‘permission’ to reach certain agreements. Proving that businesses would accept and, indeed, welcome more ambitious targets will be crucial at this time of economic downturn.

A sustainability professional at a healthcare organisation said: “There is a lot that governments can learn from the way businesses behave around net-zero. We know that acting now, acting early, is beneficial to the bottom line. Being proactive is better than being reactive. We look at the opportunities this transition provides in terms of our customers, services, products. We elevate the education of our workforce around this topic and think about the consequences of our decision-making.

“Governments say they cannot afford to act now, that it is at odds with the cost-of-living crisis. There is a very different narrative we know is right when it comes to businesses.

“Having well-designed coalitions is really important… in making sure that we are plugged in to the right representatives at COP. That public-private nexus is absolutely crucial.

“It’s also vital that we can show there is consensus among the business community”.

This idea of consensus and sending one, unified message was raised repeatedly. The COP28 Presidency team in Dubai is hoping to attract some 60,000 attendees to the two-week summit . There will, literally and metaphorically, be much noise for policymakers.

With that in mind, several attendees agreed that is has been better for their organisation to “lend its voice” to existing initiatives than to directly contact national governments at this moment in time.

The MWBC’s ‘Fossil to Clean’ campaign, which provides businesses with guidance on playing their part in addressing the world’s fossil fuel dependence, was highlighted.

Strong signals

So, businesses need to send strong signals to governments. But are they likely to be reciprocated?

One speaker said he hoped not to see another COP where “the can is kicked down the road”. While it may be hard to see how a weak global agreement could change things in the UK in the near term, he noted, it could be make or break for climate action across the international supply chains so many British organisations rely on.

Centrica Business Solutions’ net-zero strategy consultant Nebin Babu agreed: “I think that when we have a uniform agreement – like the Paris Agreement’s pledge to align ourselves to a 1.5C world – this is when action is developed by not only countries but businesses and so on… some really strong guidance and direction could help accelerate the speed of the transition.”

The firm’s head of net-zero pathways technical sales Jean-Yves Cherrault added: “Our expectations for COP28 are similar to those we have of the UK Government – we would like to see some ambition, some new commitments, and some consistency.”

There are genuine concerns about the likely strength of the agreement likely to be struck in Dubai. In addition to the challenges raised by edie’s Luke Nicholls, also to be accounted for is the fact that COP28 is the second consecutive COP to be hosted in an oil and gas exporting nation. The UAE last year pushed for a weakening of agreement language on fossil fuels and has, controversially, selected an executive from its state-owned energy company as COP president-designate.

The value of transition planning

As already noted, the organisations represented at the roundtable will be pushing ahead with their own climate action plans. While strong guidance internationally from the UN, or nationally from Westminster, would be welcome, it is not a prerequisite to action.

The development and implementation of net-zero transition plans is becoming an increasingly important part of this work. The UK Government stated its intention at COP26 in 2021 to mandate transition plans from large, listed firms in high-carbon sectors by the end of 2023.

This mandate has been put on the backburner amid changes in political leadership and current economic turbulence. There is no news yet on an updated timeline for implementation and, while the EU is mulling its own mandate, the timeline is even less clear here.

But all of the roundtable participants saw the value in acting ahead of the regulatory curve to produce a resource that goes “far beyond” existing decarbonisation targets and strategies.

The Transition Plan Taskforce’s Gold Standard outlines how robust transition plans should back up time-bound, numerical targets to cut greenhouse gas emissions with costed plans for delivery. Plans should also set out climate-related risks and opportunities; explain the business’s wider role in the net-zero transition; and evidence how a business is considering the potential impact on people.

Centrica’s Cherrault said the firm’s transition plan is “very much a business existence plan rather than purely a climate plan”. It has been crucial, he explained, to set out how the business will remain resilient, have a social licence to operate and attract staff as it diversifies away from its historic roots in fossil fuels. On staff attraction, a key facet of the plan is upskilling fossil fuel heating installers to work with renewable and low-carbon technologies.

Other participants emphasised that the main value of a transition plan is not in enhanced disclosures, but in how findings can help to fundamentally reshape business mindsets and processes internally.

One speaker said her risk team has, historically, tried to argue that climate risk is not material to her company. This is no longer a position large firms operating in the EU will be permitted to take without explaining themselves from next year. Transition planning work proved that climate risk will exacerbate all other primary risks to the business – and that it could crystallise sooner and more intensely than previously assumed.

In terms of the decarbonisation aspects of transition plans, one speaker said a lot of the “quick wins” that cut both costs and carbon have been had by her company, which is now making “difficult decisions and trade-offs between commercial and sustainability objectives.”

Transition planning, she said, has “added transparency” to the debate by forcing the collection and sharing of more robust data on the extent of the challenge and potential solutions. This has necessitated a greater deal of involvement and interest from business functions outside of the sustainability team.

For example, procurement will need to be involved if a business needs to set out new sustainability expectations for all suppliers.

Another speaker agreed, calling transition planning “a really eye-opening process” in terms of assessing the ambition and action gap between truly embedding sustainability as a responsibility in all functions, and engaging suppliers on sustainability.

This is critical as NGOs continue to scrutinize the gap between corporate climate commitments and actual progress. CDP revealed this year that three-quarters of the 19,000 companies using its disclosure platform are not on track to meet their decarbonisation targets. This is doubtless, in part, because they have been able to shelve low-carbon programmes framed as an optional nice-to-have. Transition plans should place them at the front and centre of core business strategy.

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