Net-zero and COP26: Achieving Mission Possible
Six months out from the COP26 summit, edie hosted an exclusive virtual roundtable discussion with a select group of sustainability leaders, exploring how businesses can accelerate the net-zero carbon transition in the run-up to the crucial climate talks.
COP26 is a business-critical summit when it comes to elevating levels of ambition and commitment in responding to the climate crisis. Indeed, many nations are currently revisiting previous emissions reduction pledges that they announced as part of Nationally Determined Contributions (NDCs) to the Paris Agreement and these will likely impact how businesses operate moving forwards.
As hosts, the UK has unveiled five key priority areas for the summit: the energy transition; the shift to zero-carbon transport; climate adaptation and resilience; nature and the safeguarding of ecosystems; and unleashing green finance. These five priority areas will impact businesses in different ways, but every organisation, large and small, can examine their approaches to energy, transport, nature, spending and resilience to figure out what role they’ll play in the net-zero transition.
With this in mind, edie convened a group of sustainability leaders from major organisations across the country, to discuss the net-zero carbon opportunities that COP26 represents for business. Hosted as part of edie’s Countdown to COP26 Festival and supported by O2, the roundtable had a particular focus on the ways businesses can collaborate and engage with policymakers, staff and the wider private sector to ensure COP26 creates sufficient momentum to combat the climate crisis.
Editor’s note: This roundtable was held under Chatham House Rules and as such the businesses involved have not been directly quoted in this piece. All of the content within this article is drawn from participants during the roundtable discussion.
COP26 is predominantly a convening of policymakers, as they attempt to raise global ambitions to meet the aims of the Paris Agreement. However, businesses are equally keen to align themselves with the key aims of the summit and lead the global effort to combat the climate crisis.
The UK Government has already confirmed the likes of Sky and Sainsbury’s as official corporate partners for COP26, but businesses have been urged to seize the momentum of the net-zero transition.
Indeed, the UK COP26 unit's director of partnerships and engagement, Matt Toombs, used his keynote speech at edie's flagship Countdown to COP26 event to outline exactly how businesses can properly prepare for the crucial talks. Toombs argued that businesses can specifically contribute by joining the Race to Zero campaign. This UN-led campaign now represents the commitments of more than 2,360 end-user businesses and 163 investors.
Already, almost one in three FTSE100 companies have signed up to the UN's Race to Zero campaign, designed to accelerate the adoption of net-zero targets ahead of COP26. According to the UK’s COP26 unit, FTSE100 signatories to Race to Zero represent a total market capitalization of £650m. This is before smaller businesses, non-listed firms and businesses covered by industry collaborations – like Water UK’s net-zero by 2030 roadmap – are accounted for.
Of course, getting sign-off for an official, and incredibly ambitious, business commitment is no easy task, and the participants at edie’s roundtable unanimously agreed with the need for fellow sustainability professionals to utilise “storytelling” skills to bring the concept of net-zero to life.
In many respects, net-zero is still considered jargon. Previous YouGov surveys have shown that most people do not understand the term. Roundtable participants agreed that articulating net-zero and the opportunities it brings was less about targets and data, but more about telling the success stories of how the UK and businesses are reaping benefits by decarbonising processes and operations.
With many businesses still facing financial issues as a result of the coronavirus pandemic, roundtable participants pointed to how investors and markets are increasingly focusing on low-carbon goods and services. The story here, participants argued, is that businesses should ride this wave of interest in sustainability to position themselves as industry leaders.
Greenwash was mentioned during the discussion, with some businesses claiming that there is a lack of criteria for what constitutes net-zero and whether a target is enough, or if detailed strategies are required.
During edie’s Countdown to COP26 event, which took place before the roundtable discussion, Bridget Jackson, business engagement lead at the High-Level Climate Champions, said that Race to Zero membership is an effective way to prevent "net-zero washing” as it sets “time-bound and ratcheting processes for businesses" and includes "processes and applications around pledging and planning to get to net-zero and proceeding and take action".
edie has published a new business guide detailing everything you need to know about this year's COP26 climate summit and how businesses can get involved and use the discussions to improve their approach to sustainability and the net-zero transition. View the edie Explains guide here.
Additionally, the Race to Zero Breakthroughs have been published in a special paper by the UN High-Level Climate Champions, COP26 President Alok Sharma, COP25 President Carolina Schmidt, and the UNFCCC’s Executive Secretary Patricia Espinosa. It will build on the Race to Zero campaign that was launched in June 2020. The Breakthroughs outline how 20 sectors that make up the global economy, including finance, water, aviation and clean energy, can act on near-term tipping points to move towards net-zero emissions.
The paper articulates “what key actors must do, and by when, to deliver the systems change we need to achieve a resilient, zero-carbon world”. Specifically, the initiative is aiming to get “actors” that account for 20% of each sector to commit to a series of major breakthroughs, such as setting net-zero targets, ensuring the majority of sector energy use comes from renewables and creating capacity for certain green technologies such as hydrogen and zero-carbon facilities.
Participants at the roundtable agreed that collaboration remained a crucial ingredient for the private sector in order to mobilise wide-scale change. Participants felt the responsibility was on end-user businesses to engage with laggards in the sector, but also encourage decarbonisation across the supply chain.
Research from CDP suggests that businesses could face up to $120bn in additional costs across their supply chains from the impacts of climate and environmental breakdown in the next five years. Engaging with the supply chain, which can account for more than 80% of an organisation’s carbon footprint, is therefore key.
Participants also noted the role that collaborative groups such as the RE100 or newly launched SteelZero initiative – both convened by the Climate Group – can play in helping sectors decarbonise at a much quicker rate by sharing success stories.
While the UK Government will take up the role of architect for COP26 negotiations, green groups have raised concerns about the UK not having its own house in order in the build-up to the event.
The UK Government is intending to publish a net-zero roadmap ahead of COP26 but has not yet provided an exact date. Many key policy pieces which will be summarised in this roadmap, including the Hydrogen Strategy, Transport Strategy and Heat and Buildings Strategy, have been delayed by Covid-19 and have still not been published.
Panelists agreed that a patchwork of solutions is needed and that it is not always clear how big a role each solution will play. The nature of the transition is, at present, clearer for renewable electricity than for heat and for clean transport, in the absence of the Heat and Buildings Strategy and clarity on electric vehicles (EVs) beyond the 2030 phase-out of new petrol and diesel cars and funding detailed in the Ten Point Plan.
Participants, therefore, believe that better dialogue between corporates and policymakers can help give the UK Government a holistic view of the benefits that net-zero will bring to the economy. Participants noted that clear and detailed pathways to net-zero, including what solutions and technology should be prioritised, would assist in delivering job growth, improving economic resiliency and the competitiveness of UK plc.
Businesses spent much of lockdown using coalitions such as the Corporate Leaders Group to call for a “green recovery” from the coronavirus pandemic, and this clear and concise business voice can help policy embed realistic pathways to net-zero. Participants agreed this would have to be achieved both in the build-up to COP26, and for many years after as the UK continues to move towards the net-zero target for 2050.
Commenting on the roundtable discussion and the broader net-zero opportunity, Nicola Green, Virgin Media O2’s chief communications and corporate affairs officer, said: “In the run-up to COP26, the resounding feeling from the roundtable was that collaboration is key. It’s not enough to leave the climate discussion to the policymakers in the room in November. From getting our own ‘houses’ in order, through to decarbonising supply chains and engaging our staff and customers to make greener choices, businesses have an important role to play.
“A third of the UK’s biggest companies have pledged to go net-zero by 2050 – but we can’t stop there. We need to make net-zero accessible to organisations of all sectors and sizes: and part of this is telling – as well as showing – why it makes business sense. It’s only by opening the discussion, sharing successes and learnings, and working together that we’ll go further and faster towards net zero.”