COP 28: Choices made in the next few years can play a decisive role in how the planet's future shapes up. Business choices can tide over climate risks as well as create opportunities in the transition, but more importantly, they can influence consumers
This COP28 summit is important for business. The first-ever "Global Stocktake" of progress since the 2015 international Paris Agreement on climate change is scheduled at Dubai. Elements from the report show that the global response to climate change is not enough. and the present state of "inaction" will lead to global temperatures rising by 2.4 to 2.6 degrees Celsius by the end of the century.
The report also emphasises the need to reduce greenhouse gas emissions by 43 percent from 2019 levels by 2030, to limit global warming to 1.5°C. As carbon emissions continue to rise, and we are faced with acute physical risks more than ever, the role of the private sector in accelerating progress is essential.
At COP28, countries will be expected to come to a consensus on a rapid response plan to the Global Stocktake that makes strong action statements on mitigating emissions, reducing waste, and preserving natural resources.
All this must also align with advancing climate justice for an inclusive strategy to improve people's lives. This calls for greater transparency around climate-related risks and opportunities, as well as demands for stronger commitments and actions to reduce GHG emissions and promote sustainable business practices.
Choices made in the next few years can play a decisive role in how the planet's future shapes up. Business choices can tide over climate risks as well as create opportunities in the transition, but more importantly, they can influence consumers.
The global stocktake highlights three areas where accelerated action is required. This includes scaling up renewables (and reducing/removing fossil fuel dependency), reducing emissions across industry and transport, and preserving forests. All three areas need active consumer and producer engagement
Reports show that changing our energy systems can lead to over 70 percent GHG mitigation requirements. Businesses that develop operation and supply chain strategies for an accelerated transition to renewables and reduced energy consumption, aligned with the goal of not exceeding 1.5°C can stay ahead of regulation, and reduce costs and risks.
The pooling of resources and scientific capabilities and scale up of tested, affordable technologies through collaboration in and between countries is essential to make carbon neutrality a reality by 2050. Data is crucial to generate this information and share it for maximum gain. According to the International Energy Agency report, there will be $1.7tn investments in renewable energy globally as opposed to $1tn in traditional energy demonstrating a shift to reallocation of capital.
Reducing emissions across industry and transport will need reduction of emissions in the supply chain and efficient management of demand. On the downstream influencing the consumer to choose products and services that minimise environmental exploitation over their life span will create maximum impact.
This information needs to be collated and shared responsibly and transparently. Companies need to provide consumers with data about their purchase options to indicate which products and services are more sustainable.
Deforestation is responsible for 12–20 percent of global GHG emissions. Wildfires and increasing extreme weather events will lead to even further warming, making a return below 1.5°C harder. Temperatures can be brought back below 1.5 by the end of the century, but only if global CO2 emissions become net negative. This would require carbon dioxide removal techniques, both technological and biological.
What is happening with our forests and how to prevent the destruction of forests again requires information on business use of forest resources down the value chain. Transparency is key to business sustainability, and by making data available, businesses can stay ahead of regulations.
Year 2050 is, on an average the year towards which most countries and businesses have set their goal. Ambition will need to be advanced. Business leaders can expect increased attention to climate action and sustainability at COP 28.
Revisiting targets based on the new deadlines is essential. What is also required is driving action and creating financial value by focusing on what matters, so that governance and accountability frameworks to drive action can be made mandatory with a more ambitious approach to sustainability outcomes, reporting, and data assurance.
The financial sector needs data to inform how they integrate climate into investment and finance decisions. Governments must use COP28 as an opportunity to raise ambition on national transition plans and commit to mandatory climate reporting. Collecting data remains challenging with multiple standards, so a consensus on standardisation especially from emerging economies, will be needed.
While a COP largely focuses on the importance of climate targets for governments, it is an opportunity for the private sector. The need for a higher level of private-sector involvement in climate financing and the necessity for governments and international institutions to support and incentivise opportunities are key areas of deliberation for emerging economies. Companies and investors will benefit from building new sustainable businesses here, harnessing new technologies while promoting just transition.