What's Next for Corporations After Glasgow Climate Talks?
After 2021's climate talks and a push to limit catastrophic warming levels, international business leaders must take action to, well, save the planet now.
For nearly thirty years, international governments have met annually to address the growing climate crisis. This year’s summit, COP26, occurred just after 2020 was named the hottest year on record. These international climate talks were founded under the 1992 United Nations Framework Convention on Climate Change (UNFCCC) which laid the framework that every country is bound by treaty to do everything in their will to actively reduce emissions in order to avoid catastrophic and irreversible damage to our climate and the humanity it sustains.
The COP26 summit, which was delayed a year due to COVID, drew the world’s top leaders and more than 20,000 delegates from nearly 200 countries. For two weeks, world leaders met in Glasgow to hash out new commitments and strategies to hit the key targets agreed at the 2015 Paris Summit. The Paris Agreement committed countries to keep temperature increases to no more than two degrees Celsius above pre-industrial levels—with a push to limit global warming to 1.5℃.
But in 2018, the Intergovernmental Panel on Climate Change warned that the planet faces catastrophic impacts of climate change if global warming exceeds 1.5℃, so in the years since the Paris Summit, there has been a sustained push to scrap an allowed two-degree increase and focus instead on a one-and-a-half-degree limit.
[click to enlarge/download] Infographic based on data from the World Resources Institute
Previous climate talks agreed to no more than a two-degree increase in global temps, but more recent research recommends no more than an 1.5℃ increase. Above, the effects of a mere half-degree of warming.
‘Digging our own graves’: A plea for halting climate disaster
In his opening address to world leaders at the summit, UN secretary general António Guterres delivered a passionate plea to act urgently.
(source: UNFCCC/Kiara Worth)
UN Secretary-General António Guterres addresses the opening of the COP26 Climate Change Conference in Glasgow, Scotland
“The six years since the Paris Climate Agreement have been the six hottest years on record. Our addiction to fossil fuels is pushing humanity to the brink. We face a stark choice: Either we stop it—or it stops us,” warned Guterres. “It’s time to say: Enough. Enough of brutalizing biodiversity. Enough of killing ourselves with carbon. Enough of treating nature like a toilet. Enough of burning and drilling and mining our way deeper. We are digging our own graves.
He continued: “Our planet is changing before our eyes—from the ocean depths to mountain tops; from melting glaciers to relentless extreme weather events. Sea-level rise is double the rate it was 30 years ago. Oceans are hotter than ever—and getting warmer faster. Parts of the Amazon Rainforest now emit more carbon than they absorb. So, as we open this much-anticipated climate conference, we are still heading for climate disaster.”
The disaster Guterres alludes to is one relating to time, or the rate at which the earth is heating up as it far outpaces our efforts to stop it. But what Guterres didn’t yet know at the start of the summit was that the conference itself was also heading for disaster as reported by the Guardian, BBC News, Time, and Forbes.
A failed climate conference
Despite Guterres’ pleas to keep the goal of 1.5℃ alive, phase out coal, and quicken the pace of decarbonizing the global economy, the outcomes of the summit fell short of these goals.
Two notable disappointments were the failure to renew targets for 2030 that align with limiting warming to 1.5℃, and an agreement to accelerate the phasing-out of fossil fuels.
Another disappointment was tied to funding. At the summit, developed nations were meant to commit $100 bilion to climate finance which would support the efforts of developing countries to adapt to climate change. This commitment wasn’t met and developed nations said they would not reach that goal until 2023.
Despite these significant summit fails, history was made when there was a call to phase “down” coal and fossil fuels subsidies. Although it wasn’t a call to completely phase “out” these subsidies, it was the first time world leaders and delegates agreed to phase them down, which many see as a quiet win.
Tom Dowdall, of Science Based Targets, an initiative that drives ambitious climate action in the private sector by enabling companies to set science-based emissions reduction targets said although the Glasgow Climate Pact has been met with both praise and criticism, there remains an urgent need to increase climate action to decarbonize global economies. And this action needs to be dictated by science.
“One-and-a-half degrees celsius was at the forefront, with the language of the Glasgow Climate Pact much stronger surrounding limiting warming to 1.5°C compared to the Paris Agreement,” Dowdall said. “The Pact also called on parties to revisit and strengthen their 2030 goals before the end of 2022. This near-term, urgent action is vital to prevent the worst effects of climate breakdown.”
Avoiding climate breakdown is a race against time—with time outpacing us by years.
“Whether we would like to admit it or not, we are collectively in a race against the clock,” said Cherelle Blazer, Sierra Club’s International Climate and Policy Campaign Director in a statement following the Summit.
“Lives and livelihoods are on the line, and the stakes could not be higher,” stated Blazer. “The world’s leaders, especially those from developed countries that have contributed most to the crisis and also have the most resources, need to pick up the pace—of both commitments and follow through—if we are to secure a livable planet for all.”
We now know that in order to keep global warming levels from surpassing 1.5°C, countries would need to significantly cut greenhouse emissions by 2030, and at this stage, many are lagging far behind.
In fact, scientists project that in order for the world to remain within the 1.5°C range, emissions must be reduced by nearly a half (45%) by 2030, and to net-zero emissions by 2050.
Time for business to take the lead
The lack of urgency displayed by many governments in spite of what climate scientists are warning has astounded not just global citizens, but businesses and business leaders as well.
“It could not be more clear that companies have a crucial role to play in limiting warming to 1.5°C. If more and more companies act with urgency, this can influence governmental policy and we will see a domino effect of climate action,” Dowdall said. “There is no time to waste. Businesses must act now, and take action to address the ‘code red for humanity’ and to keep 1.5°C in reach. It will only be through collaborative and sustained action that we will manage to limit the most devastating impacts of climate change.”
With 2030 fast approaching, governments and businesses have limited time to take radical action. To cut emissions by half will require every sector of society to get on board—and with governments moving at a glacial pace, those at The Science Based Targets initiative (SBTi) say there is a prime opportunity for businesses to lead the charge.
“We know the private sector has huge power to enact positive change and drive forward climate policy. Money talks, and there is no doubt that businesses must ensure their practices are sustainable and set targets that align with climate science,” Dowdall emphasized in an interview with Visier. “There is no room for anyone to sit on the sidelines; we all have a role to play. By setting near- and long-term science-based targets, companies and financial institutions can be assured that they are taking the steps necessary to join the race against climate change.”
International CEOs take responsibility
In an open letter to heads of state at COP26, the Alliance of CEO Climate Leaders representing over 90 of the largest multinational organizations like Bank of America, IKEA, and BCG said responsibility was as much theirs as any:
“We have impact and take responsibility: members of our Alliance represent some of the largest organizations on the planet, which employ over eight-million people. All members have committed to set or have already set Paris-aligned targets across their value chains, which would mitigate over 1Gt of emissions annually by 2030.”
“The Alliance also encourages all business leaders to set (science-based) targets to halve emissions by 2030 and reach net-zero by 2050 with a clear roadmap on how to get there as well as to provide transparency on emissions and their financial impact…”
“We are ready to work side-by-side with governments to scale up public-private efforts this decade in the race to net-zero.”
Another new alliance, the First Movers Coalition, debuted at COP26 bringing together over 30 global companies with supply chains across carbon-intensive sectors. The founding members include Maersk, Amazon, Apple, Volvo Group, and Western Digital to name a few.
The coalition is comprised of “major consumer goods firms that ship, truck, and fly their products, to renewable energy companies that use steel to build wind turbines.” These companies are using their force and buying power “to create the market conditions required to unleash innovation which will reduce the amount of carbon emitted in certain particularly pollutant industries.”
“There’s an important leadership transition happening on the global stage where businesses are stepping up and driving change on their own accord, in the absence of political leadership and will,” said Ian Cook, Vice President of People Analytics at Visier.
“We seem to be seeing more businesses saying there’s no time for complacency and owning the important role they need to play to lead us to net-zero,” Cook continues. “It’s no longer a choice for businesses to change the way they operate—it’s a non-negotiable for markets and businesses in every industry to transform.”
Setting targets to reduce carbon emissions is critical
Though some businesses have embraced industry change, many have not. And the task of measuring how much businesses are emitting relies on reporting. The problem is that the majority of publicly and privately listed companies don’t disclose their carbon emissions—and that’s a huge problem.
The Science Based Targets initiative is pushing for more accountability. “There is growing demand for clarity and transparency around corporate decarbonization targets,” says Dowdall. “In early 2022, we will be beginning a process to develop a Monitoring, Reporting and Verification (MRV) standard for science-based targets, which will provide a clear and standardized framework to assess and independently verify the progress of companies and financial institutions against their science-based targets.”
According to data from the Institutional Shareholder Services (ISS), two-thirds of the 500 companies in the S&P stock index have either failed to set a target to reduce emissions or have set weak ones. The ISS says that only around a third of the companies have set strong or ambitious targets.
Growing numbers of companies in the G20 are setting climate targets but most fail to align with climate science, according to research by the Science Based Targets initiative (SBTi).
Across all G7 corporate indices, 10% of companies are responsible for at least 48% of total index emissions.
“G7 countries are led by the UK and France, with 41% and 33% of disclosed climate targets being science-based. Meanwhile, some of the world’s heaviest emitters are found in the “G13” group of countries—which includes Indonesia, Russia, and Saudi Arabia—do not contain a single company to have submitted an approved science-based target.”
Pressure from consumers and citizens to go green
A climate poll conducted by the United Nations Development Programme (UNDP), released in January 2021 found that two-thirds of people think climate change is a “global emergency.”
The survey, titled the Peoples’ Climate Vote, is considered the largest ever opinion poll on climate change with over 1.2 million respondents across 50 countries covering 56% of the world’s population.
“There is majority support in nearly all G20 countries polled for more investment in green businesses and jobs, led by the United Kingdom (73%), followed by Germany, Australia and Canada (all 68%), South Africa (65%), Italy (64%), Japan (59%), United States (57%), France, (56%), and Argentina, Brazil, and Indonesia (all 51%).”
While younger people showed the greatest concern, with 69% of those aged 14-18 saying there is a climate emergency, 58% of those over 60 agreed, suggesting there is not a huge generational divide when it comes to climate concerns.
A Deloitte Global 2021 Millennial and Gen Z Survey indicates that a younger workforce and consumer base may be the key to driving change and pressuring companies to not just verbally commit to targets, but to actively follow through on these promises.
“In this year’s survey, 28% of all respondents said they’ve started or deepened their consumer relationships with businesses whose products and services benefit the environment. Conversely, about the same number have stopped or lessened relationships with organizations whose offerings they see as harming the planet.”
With an increasingly vocal and impatient groundswell of voices amplifying the urgent need for both businesses and governments to address global warming, the speed of change may quicken. But will it be enough to slow the rising temperatures and avoid catastrophic and irreversible damage not just to our businesses, our economies and livelihoods—but to humanity and life itself?
Excerpt from UN Secretary-General António Guterres’ statement to leaders at COP26:
The sirens are sounding.
Our planet is talking to us and telling us something.
And so are people everywhere.
Climate action tops the list of people’s concerns, across countries, age and gender.
We must listen — and we must act — and we must choose wisely.
On behalf of this and future generations, I urge you:
Choose to safeguard our future and save humanity.