COP27 comes at a crucial time for the planet. Temperatures continue to rise across the globe with the last decade up there with the warmest in history. The war in Ukraine has caused food shortages and unprecedented volatility in energy markets, which has dented the finances of citizens and businesses across the globe.
Hosted in the Egyptian resort of Sharm-El-Sheikh over two weeks from 6-18 November, COP27 will look to build upon the decisions made at COP26 in Glasgow last year. This years’ conference is one that is widely being positioned as an opportunity to move away from negotiating and to focus on ‘planning and implementing’ to ensure the promises and pledges made can become reality sooner rather than later.
The decisions and agreements signed in Egypt will cascade down into national targets, laws, regulations, and policies. Indeed, during COP27 Rishi Sunak’s government will announce that listed companies and financial institutions in the UK must report on their net zero transition plan by the end of 2023. This will require these larger corporations’ suppliers to set their own net zero commitments, directly affecting SMEs.
COP27 must build on momentum achieved in Glasgow after a year of volatility
A key objective of this year’s conference will be to build on success of COP26, which moved the dial in some really positive ways, especially the agreement on a global consensus on limiting temperature rises to 1.5C for the first time.
What were the main outcomes from COP26?
Some of the most notable outcomes from COP26 were:
- Signing of the Glasgow Climate Pact – This was the first ever mention of fossil fuels in the text of a COP agreement. It was welcomed for its commitment to doubling adaptation finance and requesting countries to present more ambitious climate pledges next year. Though it was not without controversy due to a weakening of some of the key language, like changing a commitment to “phase out coal” to “phase down coal”. (You can read the text here.)
- Completion of Article 6 and the Paris Rulebook – After six years of negotiations, Parties finally agreed on the ‘make or break’ Article 6 of the Paris Agreement. This highly technical section sets out the rules relating to carbon markets and other forms of international cooperation. (For more information, see here.)
- Release of joint statement from China and the USA – In an unexpected move from two of the world’s biggest emitters, a joint statement was released which reaffirmed both China and the USA’s commitments to combating climate change and implementing the Paris Agreement. (You can read the statement here.)
- Signing of the Global Methane Pledge – Some Parties committed to reducing methane emissions by 30% by 2030 compared with 2020 levels. However, there were a few notable exceptions, including big emitters such as China, India and Russia. (You can read the Pledge here. )
- Pledge to halt deforestation by 2030 – Parties signed a pledge to protect global forests, highlighting their critical role in tackling climate change. It’s now at 145 signatories. If this does turn into action from all Parties, it would protect the equivalent of over 3.6 billion hectares of forest around the world. (You can read the Pledge here.)
Reference: COP27: What to expect | Ecologi
Why does COP27 Matter to Business?
COP27 matters to business because of the way in which the decisions and agreements made in Egypt will cascade down into national targets, laws, regulations and policies. For example, in order to meet the UK’s nationally determined contribution at the COP summits, the UK Government has already set a legally-binding net zero target to achieve net zero by 2050, and a 50% reduction in emissions by 2030.
In order to honour this commitment, the UK Government and industry bodies have already mobilised a range of measures including the UK Transition Plan Taskforce (TPT).
During COP27 this Taskforce will announce:
- A framework by which listed companies and financial institutions in the UK will have to report their net zero transition plan to Government by the end of 2023, meaning a 90%+ reduction across all three scopes of emissions by 2050 at the latest. Given that particularly for larger businesses Scope 3 emissions in their value chain represent the vast majority of their total emissions, this will require these larger corporations to ask their suppliers to set their own commitment to achieve net zero.
So, although currently there are no direct Government regulations on small and medium sized businesses, if you work with a larger company you may be affected very rapidly because of the way that the international agreements cascade down into national laws and supply chains.
What outcomes do we want to see from COP27?
COP27 is being positioned as the summit where we will progress from talk of targets to implementation. Broadly we can split the objectives for COP27 into two – the outcomes we want to see from the summit itself at an international level, and the opportunity for it to act as a wider catalyst for conversations and awareness in industry and with the general public.
At Planet Mark, we want to see:
- Raised national ambitions from countries all over the world on emission reductions and committing to legal net zero targets. Currently 33 countries including the EU have set a net zero target in either law or policy and more than 100 countries have proposed or are considering a net zero target.
- Stronger wording in the agreements following the widely reporting weakening of some of the wording in the Glasgow Climate Pact. The impact of a single word change in these international agreements can be substantial, like China and India triggering a change from “phasing out coal” to “phasing down coal” allowing a lot more leeway for varied interpretation and action.
- Climate financing needs to advance substantially, as developed nations are still failing to honour their 2015 commitment to provide $100B per year to developing countries to finance climate mitigation and adaptation. It must be fully recognised that many of the nations most affected by the climate crisis are often the ones least responsible for causing it and a clear mechanism for providing sufficient funding and loss and damage reparations for climate catastrophes must be agreed in order tangible progress to be made.
- Climate Justice must continue to be at the forefront of the discussion, ensuring an inclusive approach to negotiations and a just transition to a net zero climate resilient economy all around the world.
- Urgent mobilisation of sector-by-sector climate mitigation actions to cascade action right through supply chains in a coordinated and complimentary fashion that can overcome common barriers that stand in the way of developing effective measurement, planning and delivery of carbon emission reductions.
- Lay the groundwork for a re-evaluation of collective ambitions and targets at COP28 and COP29 to recognise that what must be achieved may be changing based upon new information as the science develops and the reality of more limited progress on our global carbon budget and emission reductions than was envisaged in the Paris Climate Agreement in 2015 sets in.
Outside of the international agreements, we expect to see wider industry-relevant announcements, including:
- The ISO Net Zero Guiding Principles being created by the Our 2050 World consortium will be released, which Planet Mark have been supporting the development and roll out for as an early adopter
We hope the COP27 will also act as a catalyst to once again raise awareness of the climate crisis with industries and the public, further mobilising businesses to create their own credible net zero targets and action plans as part of the UN-backed Race to Zero, which Planet Mark is an official partner of. If you’d like to join this race and demonstrate your commitment to net zero – head to the Planet Mark website to set your official net zero target today.