A NED’s quick guide to COP26
A NED’s quick guide to COP26
You will have heard a lot about COP26 or the UN Climate Conference taking place in Glasgow in November this year, but what does this mean for your business and what should you do in preparation?
We answer your questions.
Here’s an overview of what COP is, how it’s different to the wider Climate Change Conference, and where it all started:
What is COP26?
Each year the United Nations Framework Convention on Climate Change (UNFCCC) hosts a Climate Change Conference. This started in 1994 when most UN member states committed to the UNFCCC and to work together to prevent ‘dangerous human interference’ with the climate. The first Conference was held in Berlin in 1995.
These Climate Change Conferences bring together global leaders and other stakeholders to implement the Convention. The Conference of the Parties – often called COP – is the supreme decision-making body of the UNFCCC and is part of this annual event. It brings governments together to negotiate and agree global climate commitments and treaties. COP is more often used as a term to describe the whole Conference.
Alongside these official COP negotiations, numerous side events with business and civil society also take place around the Conference.
A different state acts as president of each year, and the UK and Italy have the presidency of COP26. This has been delayed due to COVID-19 and will now be hosted in Glasgow from 1-12 November 2021.
Who might I hear about in relation to COP26?
COP is a state-to-state occasion where decisions are taken following negotiations between government officials, Ministers, and heads of state. As the UK shares the presidency of COP26 with Italy, the UK Government is playing a significant role in the diplomatic processes surrounding the Conference this year.
Alok Sharma MP is the COP26 President in the UK Cabinet. He is joined by Nigel Topping (UK) and Gonzalez Muñoz (Chile) as the COP26 High Level Champions and leaders of the Race to Zero campaign (see below), and Mark Carney who is the Prime Minister’s Finance Advisor for COP26. Andrew Griffiths MP was recently appointed as UK Business Champion to encourage UK businesses, particularly SMEs, to make credible net zero commitments.
What will happen at the Climate Conference and COP26?
The commitments that governments made as a result of the Paris Climate Agreement will be reviewed and new commitments will be made for the next five-years (see more below).
In addition, several areas where international consensus has not been reached will be re-negotiated. This includes:
- A carbon markets mechanism to agree rules for trading carbon credits between countries,
- A financial target of $100billion to support poorer countries and a new target for 2025
- The integration of nature-based solutions in the Paris Climate Agreement.
Prior to November there are a number of pre-COP negotiations in Italy. These act as a precursor to Glasgow where decisions will be taken by UN member states on these issues.
During COP itself negotiations take place in an area, known as the blue zone, which is reserved for official delegations and those organisations that are accredited with UN ‘observer status’. There will also be a number of side events limited to these audiences in this area.
During the wider Conference
There is also a green zone where more accessible and public activities occur including exhibitions, side events and national pavilions. There are also likely to be fringe events in Glasgow across the two-week period.
There will also be a Business and Industry Day during the Conference programme.
At the moment the scale of physical events during the Conference is unclear because of pandemic-related safety concerns.
Significance of this COP
COP26 is particularly important
The UK having such a prominent role at COP26 and being five years on from the Paris Climate Agreement makes this an important year. Here’s why:
Why is COP26 so important?
Though COP is hosted every year, COP26 is particularly significant as it marks five years since COP21 and the landmark Paris Climate Agreement, where 194 UN member states pledged to keep average temperatures well below 2 degrees of warming. It was the first legally binding treaty to do so and countries committed to pursuing Nationally Determined Contributions (NDCs), which consist of nationally appropriate emissions reduction targets.
COP26 will be the first time NDCs are reviewed since the signing of the Paris Climate Agreement. It is a significant step in understanding how meaningful the NDCs have been and global progress on climate change. The outcome will also result in plans for the next five-year period of the Paris Agreement.
Its prominent role in COP26 means that a lot of international attention is focused on the political leadership of the UK Government and on business ambition. The outcome of Paris led to increased pressure on businesses to reduce emissions and has seen a significant shift towards net zero ambitions across all industries. It led to investor, policy and regulatory requirements which continue to shape the operating environment for all businesses today. The UK Government has already announced its net zero by 2050 ambition, this has included a wide range of proposed policy interventions and will create opportunities, as well as challenges, for business.
What are the themes for COP26?
The UK announced five themes of focus for COP26. These are:
- Adaptation and resilience: Enabling people, economies and the environment to adapt and be resilient to the consequences of climate change.
- Nature: Using nature-based solutions such as conservation or agricultural methods to protect ecosystems and their services to help keep carbon out of the atmosphere.
- Energy transition: Making sure countries around the world transition to clean and renewable energy supplies.
- Accelerating the move to zero-carbon road transport: Promoting the transition to electric vehicles on roads to cut transport emissions.
- Finance: Greening finance by increasing investment into sustainable infrastructure and so that climate change becomes a major consideration in public and private finance.
The lead up to COP
From increased activity around the ‘Race to Zero’ to UK Government policies, there is building activity around net zero in the run up to COP26.
What is the 'Race to Zero'?
In the run up to COP26 you might hear increasing mentions of the ‘Race to Zero’.
The Race to Zero is a global campaign to unite businesses, cities, regions, universities, and investors behind a commitment to get to net zero carbon emissions as quickly as possible. If they meet the criteria, companies can sign up through the campaign’s ‘Partner’ organisations – networks who have science-based and rigorous net zero initiatives their members can join. Examples of these include Business Ambition for 1.5°C and the SME Climate Hub.
If your business has committed to Science Based Targets or a net zero plan, it would stand a strong chance of being part of the Race to Zero but would have to commit through one of the business Partners of the campaign. The UK Government is encouraging all UK businesses to sign up one of the Partner initiatives and show their support for ambitious climate action.
If you want to find out how your business can become part of the Race to Zero please have a look at the Partner organisations and initiatives listed here.
How will COP26 affect policy?
The Paris Climate Agreement has already had an impact on the climate emissions reductions businesses are required to make. This is not just from a regulatory perspective, but also through the shifting expectations of consumers, employees, investors and other stakeholders.
In 2020 the UK Government announced its intention to reduce carbon emissions by 68% by 2030 – this was the first time it had incorporated the commitment to achieve net zero emissions by 2050. This announcement coincided with the 6th Carbon Budget, showing the roadmap for emissions reductions across all sectors. You can find out more about this by watching our event with Chris Stark, CEO of the Climate Change Committee.
The Prime Minister also released his 10 point plan for a ‘green industrial revolution’ which included policies and ambitions covering transport emissions, aviation, nature-based solutions, finance and energy production. Additionally, the Chancellor announced that climate-related financial disclosure would become mandatory for all businesses by 2025 through the Taskforce on Climate-related Financial Disclosures.
These commitments and new policies, alongside the global outcomes of COP are likely to impact on the operating landscape of businesses both in the UK and globally. Stakeholder expectations, regulation, and capital are increasingly focused on encouraging and escalating a transition to net zero emissions.
COP and my business
But what do you need to do?
Although COP is very important, businesses shouldn’t wait for it to happen before progressing their own net zero plans. Here are a few things to consider in the run up to, during COP26, and beyond:
Should I (my business) attend COP26?
At the moment it’s unclear how the pandemic will impact on COP26 events. It is quite possible that only the official negotiations will happen in person. Most organisations are planning for a hybrid conference with a mixture of online and in person activities. This means you could have the opportunity to participate in the Climate Conference without going to Glasgow.
Many larger companies will have corporate or public affairs teams who are already participating in COP influencing, or working through the business networks and trade bodies, to make sure their interests are represented. However there will also be a lot of events where business leaders can showcase their business’s ambition, share their work or even announce new commitments. These are often run by the large business network organisations and participation may be worth exploring with your executive teams.
Is there anything my board should be doing about COP?
You shouldn’t wait until November to proceed with your business’s net zero ambitions and strategy. There is a lot of expectation now that companies should announce a net zero commitment before COP. This may not be realistic for those that are just beginning to have this conversation with the board. If that’s the case then you can prioritise understanding your company’s carbon footprint and where its greatest emissions are. From there you can begin to create your strategy for reducing them, including setting ambitious targets.
If policies are going to change, should I wait until COP before making changes to my business?
It is vital businesses understand what policies are being developed or announced both before, during and after COP and how these impact on your business. However, there is a lot that can be assumed based on existing or proposed policies, initiatives and programmes. This includes the strong indication that every business will need a robust net zero plan at some point in the near future.
There is also a lot of beneficial work that your company can progress regardless of policy decisions, such as developing an understanding of the risks and opportunities that may affect your business when it comes to climate change.
As a starting point you could:
- Encourage your business to look at their operational efficiencies, which could drive down carbon emissions and also reduce costs
- Ask your business to engage with employees on their understanding of climate change
- Use our Board Toolkit and Board Readiness Check to help ensure your business has strategic plans in place to respond to climate change
- Attend our events. Take a look at our upcoming sessions here.