19 May, 2021
In November 2021 heads of state, climate experts and campaigners from across the world will convene in Glasgow at the 26th UN Climate Change Conference of the Parties (COP) to discuss and agree coordinated action to tackle climate change. Now, less than 6 months out those discussions, many businesses are asking the questions, ‘What role can we play?’, ‘How can we help make this a monumental year for climate action?’ and ‘How can we leverage our resources to make a positive contribution?’ At a such a critical point climate change negotiations and our collective quest for planetary health and human survival , it’s important we, the business community gets this right. Time is not our side, we have less than a decade to deliver on the UN Sustainable Development Goals and prevent temperatures increasing beyond 1.5 degrees. So as a business community, where we direct our thinking, ideas, and resources has never been more important.
Why is COP26 so important?
COP26 is providing a sense of focus, urgency, and a hope for ambitious policy, international agreement and collaborative action on climate change. More than that, in a year where we’ve seen our relationship with the nature get truly tested, COP26 symbolises the much needed global consensus that:
- We have a climate emergency
- We need coordinated action at an international level
- There is reason to hope (and truly believe) that we have time to put planetary health and humanity back on a track for survival.
Human induced climate change is an international phenomenon and therefore needs international collaboration if we are to solve this immense challenge. The science is clear — collectively we must keep global warming down to 1.5 degrees. In model pathways with no or limited overshoot of 1.5°C, global net anthropogenic CO2 emissions decline by about 45% from 2010 levels by 2030, reaching net zero around 2050 (IPCC). So we’ve certainly moved beyond the ‘why’, but it’s when you get into the ‘how’ on carbon emission reductions that many complexities emerge — around development models, carbon pricing mechanisms, and ultimately how you can ensure a zero carbon transition that protects livelihoods and is equitable for all.
Vulnerable communities and developing nations, many of them already exposed to the worst physical impacts of climate change, can least afford the economic shocks of a poorly implemented transition. We must implement it in a way that delivers the urgent change that is needed without worsening this dual burden. Larry Fink
What is COP?
COP is a point in time when the world comes together to consider climate change through the lens of international collaboration. It’s a global United Nations summit on climate change aiming to reach international agreement on the steps needed to tackle this crisis. This will be the most important summit since COP21, held in Paris in 2015 – reviewing whether the so called ‘ratchet mechanism’ agreed at COP21 is working. Since then however, 119 countries have not updated their climate targets and will need to do so by the time COP 26 covenes. Governments will also work together to finalise outstanding elements of the Paris Agreement to shape future policy direction, as well as launching new collective financial goals.
What can business do to contribute?
Firstly what not to do…
Business is eager to play an important role in COP26. But all too often we might see this enthusiasm play out as conversations amongst colleagues along the lines of ‘…we should do something for COP’, ‘…let’s get our heads together find something to say on COP’. Throughout businesses across the globe, COP26 is appearing on campaign boards, draft press releases, employee and customer engagement posters, message matrices, and the rest. And there’s no doubt that business is keen to show their support wherever it can. But these precious financial and human resources need to be directed to the right places — we have a climate emergency on our hands. This is not a PR exercise. We have to be focusing on activity that radically reduces climate emissions from right now, not 6 months away.
As a business, the best thing you can do is use COP26 as a point in time to act radically and dial up your organisation’s positive contribution to the climate emergency and act on it.
But what does that dial up look like? How can a business go beyond the talk and make a genuine contribution in a pivotal year? Here are 3 activities for any business wanting to play its part in the year of COP26 and make a tangible contribution to carbon reduction:
Engage your board and shareholders in honest (and difficult) conversations about carbon reduction and what that means for the business model
There is no organisation whose business model will not be significantly affected by the transition to zero carbon, and a 1.5 degree world. Yet there are many businesses that haven’t so much as entertained this thought. They may have an incredibly smart, passionate and brilliant Head of Sustainability who senses the reality of the scale of transformation ahead, yet for some reason the conversations in the board are carrying on in a very much ‘business as usual’ vein. In these businesses carbon reduction is almost actively sidelined as a separate project or programme, often sitting within a siloed sustainability function and viewed as separate to the core business model.
COP26 offers a timely opportunity to get these big and difficult conversations happening around the board room. Considering the future of the business through the lens of a zero carbon (or better still regenerative) lens…
A few examples:
- What do we need to stop producing/doing?
- What do we need to produce/do in a different way?
- Who/what do we need to stop investing in?
- Who do we need to stop working with? (suppliers/clients)
- How do our core services need to be transformed?
- Do we need to make changes to our organisational structure and capability?
These are not easy conversations. They require an organisation to give up on old (extractive, carbon emitting) assumptions and ways of delivering value that have served them in the past. Ways of driving shareholder returns, securing accolades for innovation, and a reliability in attracting and retaining the best staff are brought into question. What may have worked extremely well for the last 100 years may not in a 1.5 degree world. Assumptions have inevitably shifted, and board rooms need to be revisiting their own business model and considering very honestly what that looks like through the lens of zero carbon, (or regenerative) business model. Not enough businesses are yet talking openly at this level, and to at least have started these conversations in every business would be a huge win by the time COP26 comes around.
And don’t forget the importance of taking your shareholders with you on the journey of transformation to zero carbon. We recently saw Barclays shareholders fail to pass plan to phase out fossil fuels —yet 99% of Unliever’s shareholders back plan for zero carbon. Shareholder attitudes are certainly changing, but how you involve your board, your shareholders and your customers in difficult conversations about sustainability issues like carbon, diversity, inequality and biodiversity loss is going to be crucial for future business success.
Ensure you have science-backed targets for climate change
The reason COP21 in Paris was such a milestone was that it clearly made the link between the impenetrable science and the necessary trajectory for action. In undertaking the Paris Agreement, 196 governments agreed to work to keep the world’s average temperature well below rising to 2°C above what it had been before the industrial revolution — and preferably to keep it below 1.5°C. And since the historic agreement of Paris, policymakers and businesses have been able to take forward that principle to guide decision making, and a key vehicle for that has been science backed targets for climate emissions.
Any organisation that does not have a rigorous plan in place for carbon reduction, and one that is backed by science plan will be increasingly penalised by investors, customers and employees — all of which expect action.
The UK government will set the world’s most ambitious climate change target into law to reduce emissions by 78% by 2035 and is asking businesses to make commitments to support their target by committing to the Race to Zero.
And here are just a few ways your organisation could ensure a robust approach is being adopted for carbon reduction:
- Commit to Net Zero and set a Science-Based Target
- Align to TCFD recommendations (which will enable you to assess your organisation’s ability to respond to climate-related risks and opportunities in different scenarios)
- Commit to 100% renewable energy
(And a note here to say, please don’t stop at carbon. Climate change is just one of a number of emergencies we face; ecological breakdown, civic unrest, and searing social inequalities are all critical areas for business to play its role!)
Run an ambitious ‘experiment’ to make significant carbon reduction real
Climate change is a big issue, and one that can feel very difficult to get a hold of. The reduction of carbon emissions and the year-on-year forecasting for it is complex. And for these reasons, organisations are often forced down one of two tracks:
- Incremental improvement — taking known carbon and ‘managing it’. For example, ‘to meet our 2030 goals we need a 10% year on year reduction in carbon’ so let’s achieve that by turning the lights off.
- Bold ambition, lots of talk, but very little action — endless time and money spent on complex scenario planning and detailed roadmaps, plotting an answer to the unanswerable: for example ‘Tell me exactly what do we need to achieve zero carbon by 2030?’
But what is you forced yourself and colleagues to answer this question:
‘What is the boldest action we could take tomorrow to radically reduce carbon emissions of this organisation?’
Questions like this force you out of the detail of scenario planning, the reports, certifications and public commitments on carbon, and help you consider the bold action you could take right now that would shift the dial.
And be aware that to do this right, this means corporate culture letting go of two things which it holds very dear. 1) Faultless delivery 2) Known outcomes.
Rather than strategizing and hypothesising, what if you were to throw yourselves into a real — life here-and-now carbon reduction ‘experiment’… where could it lead? What could you trial, test, prototype, reimagine? Whether that be across the supply chains you influence, the products or services you develop and deliver, the customers you serve or the staff you employee, what could radically rethink? It effectively means putting an innovation lens across carbon reduction and empowering your own employees to develop ambitious carbon reduction ‘experiments’. It means adopting key innovation principles of ‘rapid prototyping’, ‘minimum viable product’ ‘open innovation’ and ‘intrapenurship’ and applying them to the challenge of climate change, building in carbon as one of the constraints to innovation projects. And I use the word experiment here not to make it sound academic, in fact quite the opposite — this is something to drive real world outcomes, but in a way that allows people to go bold without the fear of failure. People can think and work differently, collaborating in new and interesting ways to try something out that might genuinely push the envelope of what is possible in an organisation, whilst also delivering an immediate reduction in carbon emissions.