In this article, we summarise our takeaways from the COP26 summit in November 2021 and pose five key questions to help organisations process and reflect on the outcomes
What were the key outcomes from COP26?
The 26th meeting of the Conference of Parties (COP26) was highly anticipated and attracted global attention. It followed the first instalment of the UN IPCC’s Sixth Assessment Report1 in August 2021, which revealed new, robust data to bolster existing evidence of human influence on climate change. After a year’s delay due to the COVID-19 pandemic, the COP26 summit in Glasgow brought together tens of thousands of people representing governments, non-governmental organisations, trade unions, youth organisations, activists and businesses from nearly 200 countries.
At COP26, world leaders shared their plans (Nationally Determined Contributions) to deliver the goal of holding global average temperature rise to 1.5oC above pre-industrial levels. This was a critical objective agreed at COP21 in Paris, 2015, and is widely acknowledged as the temperature after which climate and environmental changes grow significantly in scale and severity. Achieving this ambitious target requires reducing global net human-caused emissions of CO2 by 45% by 2030 and reaching net zero by 20502. As COP26 Presidency, the UK aimed to secure commitments from other countries to keep the 1.5oC target alive.
The UK Prime Minister Boris Johnson has praised the resulting Glasgow Climate Pact – the UN climate deal adopted at COP26 by 197 countries – as the “first ever international agreement to phase down coal and a roadmap to limit global warming to 1.5 degrees” 3. Further announcements at COP26 demonstrate surging momentum for climate change on a global scale, including the pledge to cut methane emissions by 30% by 2030, a pledge to halt and reverse deforestation and land degradation by the same year, a U.S. and China agreement to boost cooperation on combating climate change and India’s pledge to achieve net zero emissions by 2070.
However, to many the Glasgow Climate Pact is only a starting point, with a great deal more to be done to meet the 1.5oC target. Experts predict that even if the 2030 commitments made at COP26 are met, global warming will be limited to 2.4oC, in comparison to pre-COP26 forecasts of 2.7oC4. Early drafts of the pact included a commitment to “phase out” coal, which was adopted by some as a measure of the success of COP26. Many have criticised the final commitment to “phase down” the use of coal – following opposition from India and China on the original language – as a watered-down alternative. Nevertheless, others, including Greenpeace International Executive Director, Jennifer Morgan, feel that the resounding signal from COP26 is “the era of coal is ending5".
The provision of finance to help developing countries enhance adaptive capacity and reduce vulnerability to climate change was also a source of debate at COP26. At COP21 in 2015, developed countries pledged to increase provision of climate finance to developing countries to $100 billion per year by 2020, but this date was missed6. At COP26, this pledge and the necessity of climate financing for developing countries to address “loss and damage” was reaffirmed, particularly following the COVID-19 pandemic which has seen low-income country debt rise to record levels7.
How has the UK acted?
The UK began to position as a first mover in 2020, when the government published a white paper on ‘Powering Our Net Zero Future', containing a 10-point plan to limit global warming, with a focus on energy8. On World Environment Day in June 2021, new measures were announced requiring businesses to commit to net zero by 2050 before they can bid for major government contracts worth more than £5 million per year, including publishing plans to reduce carbon emissions across their operations9. Pressure from the opposition also increased when, in June 2021, the Labour party pledged to spend £28 billion a year until 2030 to tackle climate change if it gets into government10.
In October 2021, just before the COP26 summit, the UK government published its ‘Net Zero Strategy’, setting out ambitions to end the sale of new petrol and diesel cars by 2030, invest in hydrogen production and plans for a grant system to upgrade home heating11. Opinions are split over whether the strategy to “build back better, and greener” is sufficient, but nevertheless, the UK is the first major economy to commit in law to reaching net zero by 205012. This reflects the increasing momentum and commitment – from government, businesses and consumers – to climate action.
What does my organisation need to consider?
It is still too early to fully appreciate the impact of COP26 and actions taken in the UK. However, following the conference, we believe that all organisations should reflect on these key questions:
1. Is sustainability and social impact reflected in your strategy?
At COP26 leaders expressed a growing expectation that countries, companies and individuals should act in the best interest of the climate. In the UK, by 2023, it will be mandatory for financial firms and listed companies to have detailed public plans for how they will move to a low-carbon future, aligned to the UK's 2050 net zero target13. An expert panel will set standards for plans to ensure they are not merely greenwashing. Even organisations that are not mandated to create these plans may feel obligated to do so in the face of marketplace and consumer expectation.
2. Are your propositions still relevant in a world focused on sustainability?
A 2020 U.S. study by FirstInsight found that for Generation Z, 62% of shoppers prefer to buy sustainable brands, and 73% would spend an extra 10% on sustainable products14. Generation Z and Millennials are also more likely to make purchase decisions based on values and principles (personal, social, and environmental). This trend is likely to continue following COP26. In response, organisations may need to reconsider the sustainability and social impact of their go-to-market offerings, adapt, retire or introduce products, or implement a greener supply chain (for example by only working with suppliers who have set net zero targets).
3. Do you have the right expertise to deliver a more sustainable business and do your existing people understand their role in achieving net zero?
Around half a million people in the UK are employed in the low-carbon economy and its supply chains, and this is expected to grow15. In an article with the World Economic Forum in September 2021, LinkedIn revealed a shift towards green jobs is already underway: the ratio of US oil / gas jobs to renewables / environment jobs was 5:1 in 2015, but 2:1 by 202016. Meanwhile, 40% of millennials have chosen a job because of company sustainability17. The shift in the skillsets required and the values of employees will require organisations to consider how sustainability and social value may drive recruitment, development, and retention of talent.
4. Have you clearly defined how you will deliver your net zero strategy?
Achieving net zero will require co-ordinated effort across the organisation and its supply chain. A robust operating model and delivery structure should be established to translate the corporate sustainability strategy into action, with expertise from a range of functions, such as Technology, Finance, Facilities and Employee Communications. Ideally, these initiatives will be sponsored by senior leaders, up to and including the Board.
5. How will you demonstrate impact to stakeholders and customers?
The Streamlined Energy and Carbon Reporting (SECR) policy, implemented in April 2019, requires nearly 12,000 UK businesses to disclose energy and carbon emissions. However, a recent survey by Edie found just 35% of UK-based businesses with net zero targets have established emissions baseline data and prepared to measure emissions in the future18. Following commitments at COP26, customers will increasingly be looking for action and transparency on data and progress made by the companies they engage with. The need for external validation and ratings, such as by the Carbon Disclosure Project or Science-based Targets Initiative may increase, with demand for these services already spiking post-COP26.
What is Moorhouse doing?
Like many organisations, Moorhouse is on a journey to become a more responsible business. We also work with our clients and at senior levels to influence approaches to sustainability and social impact. You can read more about our objectives for developing people, promoting equality and protecting our planet on our website here.
For more information please email email@example.com
Emily helps organisations to deliver business critical transformation programmes and to leverage technology to achieve their goals.
Emily Blampied Manager
Joe is a Consultant in our Energy and Utilities practice. Joe joined Moorhouse with a background in supporting clients to deliver technology-enabled business transformation and continues to build experience working on industry-wide programmes in the energy sector.