At COP26, the stakes are high but the prize is great

20th Oct 2021

As leaders prepare to gather at COP 26 in Glasgow in the coming weeks, the stakes could not be higher.

This summer’s report from the IPCC concluded that changes to the Earth’s climate are now “widespread, rapid, and intensifying”. Staying on our current trajectory, temperatures are likely to rise by more than 1.5°C above pre-industrial levels within the next two decades, the authors found. The UN Secretary-General has called it a “code red for humanity”.

Climate breakdown is no longer a distant threat - it is already affecting lives and livelihoods every year, especially among the most vulnerable in the Global South.

It is vital to halve global emissions by 2030 to stand a fighting chance of keeping temperature rise to 1.5°C and averting catastrophic climate change. The future of our planet, and our children, depends on it.

We have eight years left to turn the tide.

There is hope. Last month China announced an end to funding of international coal power plants. President Biden pledged to double US climate aid, a significant boost for negotiations in Glasgow. Alok Sharma, the COP president, has stated his intent for the talks to “consign coal power to history”.

Now pledges and ambitions must convert into rapid and measurable action.

Business stepping up

In the private sector, this is already happening. Thanks to science-based targets, thousands of companies around the world are already setting emissions reductions targets in line with keeping global temperature rise to 1.5°C.

Science-based targets are for companies what nationally-determined contributions are for countries, showing how much and how quickly they must reduce emissions to be in line with keeping warming to 1.5°C.

Today nearly 2,000 companies worldwide have committed to set science-based targets. Close to 1,000 of these have now had their targets validated by the SBTi as meeting its science-based criteria.

And through the SBTi’s Business Ambition for 1.5°C campaign, more than 900 companies are already taking action in line with a 1.5°C future. These companies will be celebrated on Wednesday 10 November at COP 26, more information and details on how to register can be found here.

Ambition behind net-zero targets has been growing fast too, but to date business leaders have not had a robust, common and science-based understanding of net-zero and how to get there. Now, with the launch of the SBTi’s Net-Zero Standard on 28 October, companies will be able to translate net-zero ambitions into targets that are in line with climate science. Net-zero targets will provide vital long-term strategic direction for businesses as together we navigate this transition.

We already know the first step to any credible net-zero strategy will be reducing emissions at speed in the short term. Under our new strategy, the SBTi will only be accepting short term targets in line with 1.5°C - and now is the time for governments to raise the ambition of NDCs in line with this, too. We cannot afford to pitch our ambition any lower.

Wholesale transformation

Despite growing momentum in the private sector, there is still much more to do. We need to see the numbers of companies with net-zero, 1.5°C-aligned targets swell from hundreds to thousands, fast. In particular the G20’s largest and highest-emitting companies must urgently increase climate action to align with 1.5°C, and the G7 must lead from the front in driving climate action. Our recent report found that just 20% of G20 companies’ climate targets are science-based, with major gaps in target-setting in G13 (non-G7) nations.

Our 1.5°C future requires system-wide transformation - from investment and lending, to food supply chains, transport and energy production. Entire global supply chains must be mobilized and reimagined.

As part of our drive to exponentially grow the number of companies with 1.5°C targets from the hundreds to the thousands, the SBTi is developing sector-specific guidance and resources for the forest, land and agriculture sector, aviation and shipping companies, and the oil and gas industry.

As COP concludes we will be launching a public consultation on the Forest, Land, and Agriculture sector, to develop comprehensive guidance for companies to account for their land-related emissions and set robust and credible targets in line with a 1.5°C world.

Financial institutions will have a vital role to play, too. Their role is unique because rather than focusing on their own emissions, they have the power to direct capital to decarbonize the economy. It is critical that lenders, insurers and asset managers align their portfolios with 1.5°C, shift finance to sustainable businesses and raise the bar for emitters to reduce their environmental impact quickly.

Earlier this month we announced the very first financial institutions with validated science-based targets, and looking ahead to COP we will be launching a process to develop the first net-zero standard for financial institutions. This will allow the many institutions and net-zero alliances to create a standardized pathway to net-zero and agreement on how to achieve it. In addition, specialized guidance for private equity firms will be newly available, making these targets even more achievable and mainstreaming financial climate action.

Ambition loop - a virtuous circle

This work cannot be done by business alone. We can only succeed with sustained support from world leaders. COP 26 is an unmissable opportunity for Governments to secure a net-zero, resilient future for humanity.

If we are to halve global emissions in the next eight years, G7 leaders must urgently commit to decarbonization through robust science-based targets, and encourage G13 nations to follow suit. We need short-term robust action with long-term vision.

The framework is there for business, and as we enter COP, policymakers can take confidence from the groundswell of 1.5°C action in the corporate sphere.

The stakes are high but the prize is even greater - a sustainable, healthy, resilient and thriving future is still within reach. This is our civilization’s greatest challenge and our greatest opportunity to demonstrate all that humanity does best - creativity, ingenuity, collaboration, care.

Let us rise to the challenge.

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