COP26: Companies need certainty on climate progress with robust rules for the Global StocktakeWe Mean Business Coalition
Many of the major announcements unveiled by governments and the private sector so far at COP26 demonstrate that progress is underway. There’s a ratcheting up of ambition, which is vital to keep the chance of limiting global warming to 1.5°C alive.
But progress is not going fast enough or far enough. Even if fully delivered, the emissions pledges made by nations, plus a commitment by leaders to tackle methane, could enable the world to limit global warming to 1.8°C, according to Fatih Birol of the International Energy Agency (IEA). But that’s a big if.
While these new agreements on finance, coal phase-out, and tackling deforestation, and more, provide further impetus to accelerate climate action, much more detail on implementation is needed, fast.
For example, on energy, more than 40 countries have agreed to end all investment in new coal power generation domestically and internationally. However, while a step in the right direction, the announcement doesn’t include several major economies whose economy depends on coal. Furthermore, the phase out date agreed by the group of countries – by the end of the 2030s in major economies and 2040s for the rest of the world – needs to be brought forward 10 years to ensure we keep 1.5°C within reach.
According to Lord Adair Turner, chair of the Energy Transitions Commission, the commitment to end deforestation agreed at COP26, if supported by adequate finance and implemented and enforced, could result in 3.5 Gt of emissions reductions globally by 2030. Delivering that commitment is a crucial priority, Turner said. In the energy sector, if we commit to no new coal-fired power plants from now on and begin the phase out of older existing coal plants during the 2020s, that could save a further 3.5Gt of emissions by 2030, he added.
Clear reporting frameworks
As a key part of delivering this increased progress, governments must also ensure clear reporting frameworks so we can accurately track progress against the 1.5ºC goal. There is potential for this to be ironed out at COP26.
There has been progress on business reporting. The development of the International Sustainability Standards Board (ISSB) will provide a global standard that will facilitate the widespread and consistent disclosure of sustainability information from companies across sectors. Meanwhile, the Science Based Target initiative launched the Net-Zero Standard to provide a credible and independent assessment of corporate net-zero target setting and enable companies to align their near- and long-term climate action with limiting global warming to 1.5°C.
However, we need a way to ensure governments, businesses and society comprehensively and consistently measure and report GHG emission reductions. COP26 must deliver robust rules on the Global Stocktake in 2023.
The Global Stocktake is a mechanism to measure progress and determine whether countries are delivering on their climate pledges. It is vital to drive further action as it will accurately inform the next round of national climate targets. This is a key part of the Glasgow Package needed to drive the action needed to meet ambition.
The Stocktake must include all climate action from governments and business, and be an evidence-based process that places data at its core. For leading businesses, that are aligning their emissions reductions with the 1.5ºC trajectory, this clarity and certainty is critical. It will allow them to invest and scale up climate solutions at the required pace, and work more effectively with governments to address barriers to faster decarbonization.
Companies taking action on climate and reflecting this progress via the Global Stocktake will help give governments the confidence they need to go further and faster.
For example, analysis of 338 companies with science-based targets shows they have reduced their combined emissions by 25% since 2015. RE100 member companies are driving over 330 TWh/yr of renewable electricity demand – enough to power a medium sized country. While in the hard-to-abate sectors, initiatives including the First Movers Coalition and the Mission Possible Partnership are delivering tangible progress, such as the first zero-carbon steel.
We must grasp the opportunity of the Global Stocktake to establish it as a key moment to raise climate ambition and ensure we remain on track to halve emissions by 2030.