COP26 is the world's last best opportunity for tackling climate change. You unquestionably heard about it in the news; the planet is not doing so well. The Intergovernmental Panel on Climate Change (IPCC) recently issued an alarming report stating the earth's surface global temperature will rise to +1.5°C in the next two decades - human activities being the principal cause. Even if this scenario seems catastrophic, we can still act. That is why the COP26 is our nations’ best hope to take concrete climate actions and slash emissions to reach net-zero by 2050. If this sounds like hocus-pocus to you, you are not alone! The science and vocabulary behind climate change can be confusing and lead to tonnes of questions.
That is why Plan A will be present on the grounds of COP26, with our CEO, Lubomila Jordanova being part of the panel discussion with the New York Times - join the online event. In preparation for this international summit, we have addressed the essential points of the COP26: its core definition and goals, what is expected to happen, what can we change and finally, the importance for your company to pay close attention to the conference’s outcomes.
What is COP26?
In a nutshell, it is the biggest climate conference in the world.
The awaited COP26, also known as the 2021 United Nations Climate Change Conference, will be held in Glasgow, Scotland, between 31 October and 12 November 2021 - under the presidency of the United Kingdom and Italy. It reunites all 197 signatory members of the UNFCCC (United Nations Framework Convention on Climate Change).
Did you know? The Paris Agreement is a direct result of the former COP21, in 2015.
The goal? encourage parties to develop ambitious emissions NDCs that establish their emission reduction targets for 2030, address adaptation measures, increase climate finance and finalise the Paris Rulebook (the detailed rules that make the Paris Agreement operational).
What is expected, and what can we change?
There will be a strong focus on decarbonisation and the role of the private sector and financial institutions in concert with the states.
1. Climate mitigation: Secure global net-zero by mid-century and keep the 1.5 degrees target within reach.
Countries must develop ambitious 2030 emissions reductions targets that align with reaching net zero by the middle of the century. To have a chance to limit global warming to 1.5°C, global emissions must be slashed by 50% by 2030.
Governments have to update their NDCs every five years regarding the Paris Agreement and make them even more ambitious after each cycle - known as the ‘ratchet mechanism’. Even if countries are legally obligated to have an NDC, and implement concrete actions to achieve it - the achievement of the NDC is not a legally binding or enforceable commitment. On another note, the NDCs submitted in 2015 after the COP21 were not ambitious enough to limit the global temperature under 2 degrees.
With over two weeks to spare before COP26, Climate Action Tracker shows 89 countries have updated their NDCs and 71 have not. Of the 89, nine, including Australia, Russia and New Zealand, have submitted NDCs that are not more ambitious than previously.
To carry on these stretching goals, governments will need to:
- Accelerate the phase-out of coal: disinvestment and dismantlement of coal plants
- Curtail deforestation: focus on resources preservation and conservation - companies shall monitor their environmental impact.
- Speed up the switch to electric vehicles: investments allocated, increase in infrastructures
- Encourage investment in renewables to accelerate coal phase-out.
2. Climate adaptation: Adapt to protect communities and natural habitats
The conference is expected to empower and encourage countries affected by climate change to protect and restore ecosystems and build defences, warning systems, and resilient infrastructure and agriculture to avoid loss of homes and livelihoods. All countries should produce an 'Adaptation Communication', which summarises what they are doing and planning to do to adapt to the impacts of the changing climate, challenges they face and where they need help.
3. Mobilise finance for net-zero transition
To deliver on the first two goals, developed countries must follow their promise to mobilise at least $100bn in climate finance per year by 2020. So far, governments have been falling short on the contract - and the conference might bring this challenge to light. Also, International financial institutions must play their role and work towards unleashing the trillions in private and public sector finance required to secure global net zero.
OECD Secretary-General Mathias Cormann said.
4. Collaboration: Work together to deliver tangible results
International cooperation can only solve the climate crisis. The summit will:
- Finalise the "Paris Rulebook": find a solution on carbon markets by creating a solid system of carbon credits that supports the move to net zero.
- Resolve transparency issues by establishing a universal system that encourages all countries to keep to their commitments.
- Broker an agreement that drives ambition from governments over the coming years to keep 1.5 degrees a reality.
- Less talk, more action: Accelerate climate action through collaboration between governments, businesses and civil society.
Our takeaway: We believe that there is no global solution without change at the highest governmental level. That is why COP26 is critical in shaping an international climate coalition.
Three reasons why your company should care about COP26?
1. A shift in new regulations
According to the Grantham Research Institute on Climate Change and the Environment, there have been 2110 environmental laws passed globally since 1947, with 2,037 of these laws passed since the inaugural COP took place in 1995. COP26 allows businesses to get an early insight into where the law might be heading to work collaboratively with governments. Companies must engage with policies that help countries deliver on their emissions targets while protecting jobs and driving economic growth and prosperity.
Learn more: Read our whitepaper on the EU Taxonomy Regulation
2. Stimulate Green Finance market
Capital will be directed toward sustainable companies and countries, putting in jeopardy polluting business models. Simultaneously, there is an increasing focus on "greenwashing", driving standardisation, and defining "sustainable economic activity". Greater vigilance will prevent companies from shifting assets to countries that don't prioritise the environment. The EU's consideration of a carbon border tax to mitigate unintended consequences of its emissions trading system is one example of that vigilance in action.
Companies must keep track of green financing arrangements – both positive and negative – likely to come out from COP26, as well as anything specific to their areas of focus, such as clean air or habitat protection. There is an opportunity to tap new sources of capital and gain an early mover advantage.
3. Drive consumer behaviour and business revenues
There is rising pressure from consumers for businesses to become sustainable and reduce their carbon footprint. Companies have an opportunity to create value and grow revenues by responding to the trend for sustainable consumption.
Climate change is arguably the most significant business risk and the most prominent commercial opportunity of all time. Businesses seeking to manage this risk and seize this opportunity to protect and create value from sustainability should pay close attention to COP26.
