COP26 - Did it deliver for businesses?

COP26 - Did it deliver for businesses?

Over the past two weeks, the headlines have been dominated by COP26, and specifically the negotiations between the world’s economies on setting stricter climate targets to keep the Paris temperature goal of 1.5 degrees on track.

These are big decisions being made at national and international level, but, when the dust settles, what does it mean in the ‘real world’ for UK businesses?

For us, there were four key takeaways for businesses from COP26:

Net zero action needs to be credible for businesses

COP26 understandably provided the platform for many corporate carbon reduction announcements. However, alongside this, the issue of credibility took centre stage, with Antonio Guterres, UN Secretary General, setting the tone by saying that "There is a deficit of credibility and a surplus of confusion over emissions reductions and net zero targets, with different meanings and different metrics”.

On Finance Day, the Chancellor announced that the UK will become the first net zero aligned financial centre, and that big UK firms and financial institutions will have to produce detailed public plans on achieving a low-carbon future from 2023. Plans will be submitted to a panel of experts, known as the Transition Plan Taskforce, to mitigate against greenwashing.

Following this, the IFRS Foundation Trustees confirmed the formation of an International Sustainability Standards Board (ISSB), formed to create a global baseline for corporate sustainability disclosures that meet investor demands. There was also the launch of a new award from the Prince of Wales' Sustainable Markets Initiative - The Terra Carta Seal - for companies who 'hold a leadership position' on net zero.

The road to renewables needs to accelerate

Linked to this, the UN-backed Race to Zero campaign, which calls on businesses, cities, and other organisations to set credible net zero targets, announced that the campaign now includes 5,235 businesses, 67 regions, 441 financial institutions, 1,039 educational institutions, 52 healthcare institutions and 1,049 cities. In the UK, 60% of the FTSE 100 have net zero plans in place, indicating that there is still work to be done.

One of the key ways businesses are set to achieve this will be using energy from renewable sources. The tricky area of coal - and how to phase out fossil fuels - was a key area of discussion. In a major step, 190 signatories, including countries and organisations, pledged to phase out coal power and over 20 countries signed up to a new declaration pledging to end the financing of fossil fuel infrastructure overseas. In the UK, the government confirmed £210m funding for Rolls Royce to develop small nuclear reactors to generate clean energy.

Electric Vehicles (EVs) take centre stage

On Transport Day, the Department for Transport and the Department for Business, Energy and Industrial Strategy published an international commitment to work towards 100% zero emission vehicle sales by 2035 at the latest in leading markets, and 2040 globally, which was signed by many leading countries and manufacturers. However, four major car manufacturers and large economies, including the US, China and Germany, were notable by their absence.

The government also confirmed that all new HGVs in the UK will have to be zero emissions by 2040, and Transport Secretary Grant Shapps unveiled a new UK charge point, designed to make EVs more accessible for all.

That said, there is clearly more to be done as new research revealed that two thirds of local authorities have no plans for EV charging.

Energy efficiency gets a Presidential seal of approval

We have always said that energy efficiency is a ‘no regrets’ action for businesses, and this was reiterated by none other than former US President Barack Obama, who said that "Companies are starting to figure out that becoming energy efficient is better for their bottom line”, and that tackling climate change will help firms "win customers and employees".

On Energy Day, we saw the launch of the COP26 Product Efficiency Call to Action by the International Energy Agency, which calls for the doubling of efficiency of four key products - air conditioners, refrigerators, industrial motors and lighting - by 2030. This could have a huge impact on businesses.

Decarbonising the built environment is also one of our biggest challenges. The UK Green Building Council (UKGBC) unveiled its much-anticipated ‘Net Zero Whole Life Carbon Roadmap’, which includes several policy recommendations for the government. For businesses, it wants to see mandatory energy performance disclosure for non-domestic buildings and minimum standards by sector introduced.

Turning ambition into action

The key message from COP26 for business is ‘don’t wait’ to turn ambition into action. However, with increased focus on the credibility of carbon reduction plans, it is vital that they stand up to scrutiny. The technology is available now that can make a huge difference - from energy efficiency to renewables to EVs - so businesses have the tools they need to play their part in this critical decade of delivery.

For help with your net zero plans, talk to your Client Lead (existing customers). Or contact us at nBS@npower.com. You can also download our new range of net zero resources here.

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