PUBLISHED 11/2021
BLOG - COP 26: OUR KEY TAKE AWAYS
COP26 has concluded, and the two weeks of intense negotiations in Glasgow have come to an end. Different emotions are floating in the air after the summit. While many pose disappointment with the summit outcomes, it has created momentum. A seed to harvest as time is ticking.
Here are our takeaways from the COP26:
1. Nature gets a seat at the table
Biodiversity and nature had a much stronger role than ever before, with more than 130 countries promising to halt deforestation by 2030, including — crucially — forest heavyweights Brazil and Russia, as well as the Democratic Republic of Congo and Indonesia. In addition, 26 nations vowed to make their agricultural policies more sustainable and a US$8.7 trillion coalitions of investors committed to removing deforestation driven by agriculture out of their commodities portfolio by 2025.
2. Reducing carbon emissions is paramount
Carbon reduction and net-zero emission remain at the core of negotiations. The aim to cut down emissions to “net-zero” by 2050 is becoming increasingly crucial. Countries and companies will be able to invest in sustainable projects that lead to certified emissions reduction in another one as international trading for emission reductions will be facilitated as part of Article 6 of the Paris Agreement. In addition, carbon offsetting and carbon pricing have been given as efficient ways to meet net-zero commitments against climate activists who do not want this to be a ‘substitute action’ towards cutting down carbon emission. Everyone is aligned on one point: whether it is one country or another, the use of carbon-emitting activities must reduce drastically for our planet to be saved, and the current commitments are not enough to reach the 1.5° objective. Current plans are too weak to stop the disaster.
3. Finance is key for decarbonisation
Creating climate capital has been one of the main barriers to creating a net-zero economy, and the funds must raise for any progress to be made. COP26 acknowledged the lack of funding for decarbonisation and the disparity between rich and developing countries. The Glasgow Financial Alliance for Net-Zero (GFNAZ) has pledged over $130 trillion of private capital to transform the economy for net-zero. These commitments from over 450 firms across 45 countries can deliver the estimated $100 trillion of finance needed for net zero over the next three decades. Heavy lifting will be needed in the next decade to turn the dynamic around.
4. Aligning Global ESG Reporting
A key takeaway is also the alignment on the need to harmonise ESG reporting. The International Finance Reporting Standards Foundation (IFRS) has announced the formation of the International Sustainability Standards Board. This aims at simplified reporting standards and provides a global framework for sustainability reporting. This initiative was particularly welcomed since the companies and stakeholders have struggled with ESG reporting and overlaying frameworks.
5. Underlying inequalities and the need for solidarity
We observe that the North/South divide remains vivid amid decarbonisation talks. India has highlighted the large disparity in historical emissions of rich or developed countries and developing countries. The Climate Equity Monitor has a stark map of carbon credit/debt, which shows all the northern countries, including the United States, Russia, Australia, most European countries, have exceeded their fair share of the global carbon budget. In addition, China, followed by the US and the EU, have the highest historical greenhouse gas emissions. But it is just the beginning, as the climate crisis will increase further inequalities, people will have no access to water or to food to feed their children.
6. Increasing role of activists for better futures
We cannot solve a crisis with the same methods that got us into it in the first place. Scientists and activists were disappointed with the outcomes. People demonstrated in the street of Glasgow to get their voices heard. The climate star Greta Thunberg considers that COP26 is “a failure, where leaders are giving beautiful speeches and announcing fancy commitments and targets, while behind the curtains, governments of the Global North countries are still refusing to take any drastic climate action.” Nevertheless, activists are putting pressure on those in power, asking our leaders to wake up and act. The question of fairness is also at the heart of conclusions as many activists found the conference to be one of the ‘whitest’ and least equitable gathering as only 16% of delegates were women. Still, a long way to go.
7. Private sector: Saving Grace
Although public commitments are tackling carbon emissions, global governance, transparency, and sustainable finance, the industry remains instrumental in the implementation of solutions. In that respect, we also embrace a change as CEOs are increasingly taking responsibility to build ESG strategies at the core of their operations. As we reimagine the way we do business, we need courageous leaders. Courage is the necessary spark to turn any system upside down, opening an honest dialogue about the root causes of the challenges changemakers face in scaling transformation, and harnessing the power of a collective approach will be critical to building better futures.
As the COP26 has ended, so has the hopes and expectation from governments when it comes to drastic steps. Commitments will not reduce CO2. Pledges will not stop our planet from burning. Action will. Now is the time when courageous companies will need to showcase a positive impact and put purpose into practice.
