COP26 is the most recent UN Climate Change Conference held by the Conference of the Parties, attended by countries that signed the UNFCCC, hosted in Glasgow in November 2021.
If you are wondering what to make of the COP26 talks and how it will affect businesses and nations, then this is for you. We'll give you the key takeaways from what was discussed in 2021.
We saw cross-sector collaborations through diverse industries and public and private organizations making pledges. Businesses realize the importance and the urgency of becoming carbon-neutral and are utilizing the technology tools to build successful strategies.
Companies are now held to a standard of tracking emissions, reporting emissions, and reducing them. Yielding to that requires implementations that must be enforced, not only counting for scope 1 and 2 emissions but for choosing the outside sources that are responsible for their scope 3 emissions.
The demands from consumers to value chain experts are reshaping the way that we do business as a whole. For example:
We are already seeing new job opportunities arising in the next decade that are going to change everything.
In the UK, any business registered will have to report their net zero plans to the Treasury by 2023. Many other nations are setting similar standards and no matter where they are, there are some core parameters that businesses will have to account for in planning. Reporting will not only be in the interest of governments but of stakeholders from investors to consumers. Although transparency standards were not set concretely in COP26, value chains are going to have to accommodate no matter what to satisfy consumers and investors that are carbon conscious.
Preparation must be agile in order to meet the shifting CO2 emissions requirements going forward. With abrupt and long-overdue closures of facilities like coal mining plants and public outbursts against anything fossil fuel continuing to run, the force which is driving the race to net zero is now becoming a healthy competition and value chains are beginning to outdo their competitors. There isn't a part of the value chain that isn't going to be affected and it will take effort on the part of everyone to contribute their ideas to new procedures.
The talks at COP26 urged politicians and businesses to meet the conditions necessary to keep global warming under 2C and under the pressure of environmentalists, climate disasters all over the world, and street riots, there's no getting around it. It's not enough for a 1.5C goal at all. To keep temperatures under a 1.5C objective, businesses would have to collectively cut emissions by half by the end of the decade and nations would have to enforce that.
We'll take a look at some of the key drivers that world leaders highlighted and what this means for the transitions that industries and businesses would have to take:
In addition to the Glasgow Climate Pact that was reached, the leaders emphasized starting to phase out coal, ending finance towards fossil fuels, getting rid of internal combustion engines, and stopping reverse forest loss. This means that these industries and industries heavily and less reliant on coal and fossil fuels need to get going on proactive transitions.
46 countries committed to phasing out domestic coal. That will shift workers' jobs to cleaner industries but it isn't going to enforce the statutes in other coal-producing countries that the former ones can still utilize.
More defenseless nations have reached out to first-world powers, emphasizing that they don't have the infrastructure or monetary resources to be able to sustain hotter temperatures, even worse climate disasters, or the short-term costs associated with their transitions. Barbados Prime Minister Mia Mottley, spoke out to leading nations, pleading for them not to “allow the path of greed and selfishness to sow the seeds of our [island nations'] common destruction.” Businesses need to take into consideration the climate devastation on more geographically and financially vulnerable societies when making strategies. After all, first-world powers are planning foreign aid packages to help developing nations with their carbon-neutral transitions.
Many smaller nations like islands couldn't attend Glasgow because of COVID-19 logistics restrictions. External companies can take them into consideration when planning offsetting projects and unavoidable business travel.
More countries are making an effort than at previous conferences. Prime Minister Modi from India (the 4th highest carbon emitter) has stated they will set an objective of 2070 for net zero. North American and European businesses have shied away from changing vendors and sources, especially in the industrial sector, and instead have just focused on whether they finance nationally or internationally, ignoring that it is all one large ecosystem.
Modi was the only leader from the BRICS nations, (that account for 40% emissions), that attended COP26. The other nations, where much of the manufacturing, steel, shipping, and more industries are, are dragging their feet on pledges which means businesses may need to think about bringing some of the work home, which would drive some product prices higher, but some people are prepared to pay.
Spanish Prime Minister Pedro Sánchez plans to increase the government's funding for climate by 50 percent within a few years. If businesses do more, the taxation won't be so extreme for its citizens.
Related content
To find out more about curbing your carbon emissions, please read a recommended article from our library:
• Article: Carbon Neutral vs. Net Zero: What’s the Difference?
• Article: What Is Corporate Sustainability and How to Achieve It
• Article: Carbon Emissions in the Atmosphere and the Methods of Abating Emissions
What were some negotiations affecting businesses directly at COP26?
The World Resource Institute says, "This is critical to make real progress on reducing emissions. Countries also decided that 5% of proceeds must go toward funding adaptation under traditional market mechanisms (Article 6.4), though under bilateral trading of credits between countries (Article 6.2) contributing funds toward adaptation was only 'strongly encouraged,' which may reduce this potentially secure source of finance for adaptation." The concern is that older carbon credits will be taken advantage of.
What businesses can do is utilize carbon management software instead of using expensive consultants. Net0 offers intuitive reduction strategies according to a business' data and trustworthy and certified carbon offsetting projects that help businesses understand, control, and eventually eliminate their carbon emissions while producing investor-grade reports to communicate those progressions to their stakeholders. Request a demo here.
Fortunately, over 1049 cities and local governments joined C40 Cities, which represent 722 million people, to take action against climate change, so businesses will have to comply with local governments' standards as they change rapidly. Preparing for it now is crucial to change.
Regardless of what was negotiated at the COP26 talks, we are all responsible to take action. Little by little laws will be enforced and emissions management software will become a core necessity in business reporting. It's never too early to begin a strategy for the good of the environment, the demand from consumers, and the policies that will be imposed by local governments.
Book a call with Net0 and experience how we can further your journey with easy-to-use GHG emissions management software that includes your whole team with personal dashboards for better organization and responsibility allocation, encouraging everyone to use it. Having a proper tool for your carbon accounting will accelerate your mission and alleviate seemingly difficult processes.
Cover image source: UK COP26
