The decisions made by the international community at the COP26 climate change summit in Glasgow will eventually affect every business regardless of its size and location.
Failing to mitigate and adapt to climate change is now consistently ranked within the top 10 global risks by businesses, alongside extreme weather events and natural disasters, according to the World Economic Forum’s annual Global Risks Report. Climate-related risks are wide-ranging, persist throughout value chains and pose severe financial and health and safety threats to companies worldwide.
Organisations have reported work-related injuries and fatalities associated with heat stroke, flooding and other extreme weather events as a result of climate change.
The need to tackle the causes and effects of climate change is therefore directly related to protecting workers’ health and safety but requires global collaboration between countries.
One such global approach is set out under the United Nations Framework Convention on Climate Change, the UN’s climate body, that holds annual summits known as a COP, or Conference of the Parties. These are attended by national ministers and, for the key summits, heads of state.
In November 2021, the UK will be hosting the 26th annual session of the COP in Glasgow. The conference is being coordinated by Conservative MP Alok Sharma, who was appointed chair of COP26 in February 2020.
This is the first time the UK has hosted the conference, which was originally scheduled for November 2020 but postponed due to the Covid-19 pandemic. In addition to COP26, the UK is hosting the G7 summit in Cornwall in June, and the G7 have also put climate change discussion at the top of the list for that meeting as a precursor to the Glasgow conference.
At the conference in Glasgow, delegates, including heads of state, climate experts and negotiators, will come together to agree coordinated action to tackle climate change.
As well as the negotiations, there will also be space for countries, international organisations and other delegates to showcase climate action, highlight diverse climate change issues and share knowledge. Much of this year’s climate conference will centre on delivering goals to tackle global warming set out in the 2015 Paris Agreement, as well as moving the UN Climate Change process forward.
COP26 will also stress the role of international financial institutions and development banks and their boards in enabling organisations to access sustainable green financing – especially for climate change mitigation and adaption – recognising that climate-related impacts will have financial implications for businesses. The UK government has committed to making the City of London the global centre of green finance.
In remarks at the opening of the Leaders’ Summit on Climate hosted by the United States in April 2021, UN Secretary-General António Guterres called on the international community to make this “a decade of transformation”, starting by building a global coalition for net zero emissions by mid-century to reach the goals of the Paris Climate Change Agreement. “Young people are pushing their elders to do what is right,” he said.
The next step in the right direction, he urged, is for all countries – starting with major emitters – to submit new and more ambitious climate action plans (known as Nationally Determined Contributions, or NDCs) – under the Paris Agreement.
In December 2020, the UK communicated its new NDC under the Paris Agreement to the United Nations Framework Convention on Climate Change. The NDC commits the UK to reducing economy-wide greenhouse gas emissions by at least 68 per cent by 2030, compared to 1990 levels.
It also includes information on how this target was developed and is quantified. As well as the NDC, the UK has published an Adaptation Communication, and a Biennial Finance Communication. These are complementary to the NDC and also required under the Paris Agreement. Taken together these detail UK action across the mitigation, adaptation and finance pillars of the Paris Agreement.
Whatever is decided from the COP26 Glasgow summit, ultimately the goals and targets agreed will affect every business regardless of size and location. Moreover, those businesses that are now proactively measuring, monitoring and reducing their greenhouse gas emissions – and taking steps to mitigate and adapt to climate change – will be in a much better position than those businesses literally burying their heads in the sand.
A recent poll suggested that nearly three quarters of the UK public think business has a responsibility to protect the environment and the majority favour brands that do ‘good’ in the world.
Some businesses are more proactive when it comes to climate change and controlling and reducing greenhouse gas emissions. These forward-thinking businesses are establishing systems to manage their greenhouse gas emissions, such as using the ISO 14064-1:2018 standard to quantify and report on their emissions. Many are also seeking to adapt to climate change using guidance set out in the ISO 14090:2019 standard on adaptation to climate change.
Race to Zero
Almost one in three FTSE 100 companies have signed up to the UN’s Race to Zero campaign, designed to accelerate the adoption of net zero targets ahead of COP26. In joining Race to Zero, these organisations have committed to setting more ambitious targets in line with climate science and to using their reach to encourage climate action across their operations. This includes suppliers, customers and their respective sectors.
The FTSE 100 signatories represent a range of sectors, from retail (Sainsbury’s, Tesco, JD Sports), healthcare (AstraZeneca), telecommunications (BT, Vodafone), the built environment (British Land) and consumer goods (Unilever). All these organisations are committed to the same overarching goal: achieving net zero emissions as soon as possible, by 2050 at the very latest, (if not before), and setting concrete plans to achieve them.
Globally, more than 2,500 companies have joined the Race to Zero to date. The UK government has stated that UK businesses are “at the front of the pack internationally” on climate change, but that it would like to see more businesses planning to meet or exceed the legally binding net-zero target for 2050. Will your business sign up to the Race to Zero?
Better Business Act
For those businesses that don’t engage in voluntary proactive initiatives to tackle the causes and effects of climate change, there is currently a drive to kick-start UK business on this journey towards a net zero future.
The Better Business Act is a coalition of over 400 businesses which is urging all of Britain’s business leaders to call on the government to amend Section 172 of the Companies Act to ensure businesses are legally responsible for benefiting workers, customers, communities and the environment while delivering profit.
If adopted, this would make the UK the first country in the world to make it mandatory for all UK businesses to advance the benefit of both shareholders and stakeholders (including our climate). This will enable businesses to focus their innovation, ingenuity and power on solving the problems facing people and our planet rather than creating or contributing to them.
The Better Business Act would mean business are legally obligated to operate in a manner that benefits their stakeholders, including workers, customers, communities and the environment, while seeking to deliver profits for shareholders. The Better Business Act would transform the way business is done, so that every single company in the UK, whether big or small, takes ownership of its social and environmental impact, including the causes of climate change.
Over 500 businesses in the UK have already joined a coalition to support Act, including well-known brands such as John Lewis/Waitrose, Danone, The Body Shop, the Institute of Directors, Innocent and Brewdog. If adopted, the Act could eventually apply to most UK businesses to ensure that company directors are responsible for advancing the interests of shareholders alongside those of wider society and the environment.
Build Back Better Plan
Post the Covid-19 pandemic, the UK government has also developed a Build Back Better Plan. At its heart are plans is to transition to a net-zero future, and support economic growth through significant investment in infrastructure, skills and innovation. To deliver this, and to be able to meet the net zero goals and targets, the UK government has developed a 10 point plan. These are:
- Offshore wind: Producing enough offshore wind to power every home, quadrupling how much the UK produces to 40GW (gigawatts) by 2030, supporting up to 60,000 jobs.
- Hydrogen: Working with industry aiming to generate 5GW of low carbon hydrogen production capacity by 2030 for industry, transport, power and homes, and aiming to develop the first town heated entirely by hydrogen by the end of the decade.
- Nuclear: Advancing nuclear as a clean energy source, across large scale nuclear and developing the next generation of small and advanced reactors, which could support 10,000 jobs
- Electric vehicles: Backing UK car manufacturing bases to accelerate the transition to electric vehicles and transforming our national infrastructure to better support electric vehicles.
- Public transport, cycling and walking: Making cycling and walking more attractive ways to travel and investing in zero-emission public transport of the future.
- Jet Zero and greener maritime: Supporting difficult-to-decarbonise industries to become greener through research projects for zero-emission planes and ships.
- Homes and public buildings: Making UK homes, schools and hospitals greener, warmer and more energy efficient, whilst creating 50,000 jobs by 2030, and a target to install 600,000 heat pumps every year by 2028.
- Carbon capture: Becoming a world-leader in technology to capture and store harmful emissions away from the atmosphere, with a target to remove 10MT (million metric tonnes) of carbon dioxide by 2030.
- Nature: Protecting and restoring the natural environment, planting 30,000 hectares of trees every year, whilst creating and retaining thousands of jobs.
- Innovation and finance: Developing the cutting-edge technologies needed to reach these new energy ambitions and make the City of London the global centre of green finance.
Dr Keith Whitehead CEnv is Senior environmental consultant at the British Safety Council
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