COP26 key themes: The top 7 takeaways for businesses
17 November 2021
Described as humanity’s “last best chance” to reduce emissions enough to keep the planet below 1.5 degrees Celsius, the 26th Conference of the Parties (COP26) has just come to a close. Safe to say there were big commitments and even bigger promises, but away from all the media noise - what are the COP26 key themes and implications for you and your business?
We have rounded up the top seven takeaways for your business.
1. It’s “one minute to midnight” and we need to act now
In the run up to COP26, various reports were published that unequivocally demonstrated the dire environmental situation, with the United Nations (UN) stating that the planet is “changing before our eyes” due to the climate crisis. Boris Johnson summed it up in his opening speech: we have run down the clock on climate change. We are not planning for changes in the distant future; action must be taken and it must be taken now.
2. Businesses have a vital role to play
Of course, Governments have a significant role to play in combatting climate change, including shaping regulation, applying pressure and setting an example from the top. However, businesses arguably have an even more critical role to play. They are far more agile than Governments, and are able to adapt, react, and change much more quickly. Public perception, investors and regulatory pressures are already acting together to force environmental issues to the top of the priority list for competitive businesses.
3. Competitive organisations are already leading the way
When we say ‘competitive businesses’, a prime example is Amazon. As well as committing US$ 2 billion in tackling global food systems and restoring landscapes, Jeff Bezos also announced Amazon will be powering its operations by 100% renewable energy by 2025.
And he is not alone in prioritising sustainability. Over 50% of FTSE 100 listed United Kingdom (UK) companies have also made climate commitments, with 30 companies pledging to cut their emissions to zero by 2050 or before.
Such commitments are a testament to how high sustainability is on all leading corporation’s agendas, and will work to inspire and motivate other businesses across the globe.
4. Finances have been mobilised to facilitate change
450 organisations controlling $130 trillion – around 40% of global private assets – agreed to back “clean” technology, including renewable energy.
The UK's Chancellor of the Exchequer, Rishi Sunak, also announced funding for green economies will be increasing significantly, with the UK contributing alongside other major players such as the US and China. The UK’s flagship green investment programme, MOBILIST, received an increase in funding of £66 million to support the infrastructure, technology and businesses developing countries will need to manage climate change and boost growth. The UK will also become the first net-zero aligned financial centre, and developed nations will deliver $500bn of climate finance over the next five years.
5. Collaboration will be vital as companies race to net zero together
COP26 is itself a global collaboration exercise, with world leaders coming together to tackle one universal concern. But this only marks the beginning of unprecedented collaboration between key players.
Industries that have historically been disparate, including the oil, gas, power and renewable industries, will have to work together in unprecedented ways. Each industry will already have their own regulatory requirements to comply with, so interactions between each other and with Governments will be necessary – particularly in terms of implementing updates to legislative or regulatory frameworks. Collaboration between all stakeholders will be fundamental to achieving net zero as quickly, efficiently and reliably as possible.
6. Regulation will continue to get tougher, including mandatory disclosures
This is a big one: most large UK firms and financial institutions will be forced to show how they intend to hit climate change targets. The UK are the first country to mandate Taskforce on Climate-Related Financial Disclosures (TCFD), which is an environmental reporting framework which helps companies report consistent climate risks and opportunities. This new law is arguably one of the most impactful environmental, social and governance (ESG) related mandatory disclosure rules to be introduced, and in theory should go a long way in tackling the real concern that is greenwashing.
The move aims to increase transparency and accountability, providing consistent climate data, proper climate risk surveillance and proper global reporting standards.
However, controversially, the net-zero commitments will not be mandatory. Veronica Oakeshott, head of forests policy and advocacy at Global Witness said “today’s announcement by banks risks amounting to more greenwashing if it’s not legally binding.”
But what we can be sure of is this: organisations should prepare for increasingly tougher regulation, and they must have the digital infrastructure in place to enable this.
7. Spotlight on supply chain due diligence
A shocking 83% of a consumer industry’s carbon footprint is in its supply chain, so it is not surprising that there was a spotlight on the impact of supply chains throughout the summit. Other countries followed the UK’s lead by mandating more disclosures. Significantly, the European Union (EU) also announced they would be proceeding with their corporate due diligence and corporate accountability directive. This will require organisations to identify, address and remedy their impact on human rights and social aspects of ESG due diligence.
What you can do now
COP26 must represent a significant turning point for businesses, with the attention, regulation and funding powering impactful change. Leading firms are already acting, and your business must do the same in order to remain competitive.
Ideagen partnered with the Chartered Quality Institute (CQI) to ask 30,000 quality and audit professionals whether they think their business is doing enough to protect the environment, what initiatives their business has taken, and to share their examples, ideas and advice for us to share in this report.
Download our full report to learn more about the steps other quality professionals are taking to accommodate these COP26 key themes, including futureproofing their organisation against ESG risks, and see exclusive insights into how other quality professionals approach such risks.