Business welcomes The Glasgow Climate Pact: We Mean Business Coalition statementWe Mean Business Coalition
This statement is the We Mean Business Coalition response to the Glasgow Climate Pact, agreed at COP26.
The Glasgow Climate Pact represents a vital step in our shared efforts to keep global warming to 1.5°C and implement the Paris Agreement and will be welcomed by the business community. The Pact and recent pledges keep 1.5°C alive, just. BUT to get 1.5ºC out of intensive care we must fast track implementation of all pledges and national plans.
The deal agreed in Glasgow provides us with an important framework for bridging the gaps in ambition on mitigation, adaptation and finance, and help bring us on track this decade to a 1.5°C future. It underscores the resilience of the Paris Agreement and the power of multilateralism to achieve our shared aims. It also represents crucial progress in creating that space for business to drive investment and innovation. This in turn will give governments the confidence to ratchet up their plans; take rapid, concrete action; and implement the national policies required to reduce emissions.
Ahead of COP26, more than 750 businesses, employing 10 million people globally and with US$2.7 trillion in annual revenue, wrote to G20 leaders with a set of clear policy asks. As the details of the COP26 Glasgow Climate Pact emerge, it is clear the voice of forward-looking business has been heard, but there is still much work to do.
In addressing the climate crisis, and its impacts, it’s vital that business plays an integral role in building stronger, just, and more resilient economies that leave no-one behind. Transforming our economies in line with the goal of limiting global temperature rise to 1.5°C means business playing its part in supporting vulnerable communities and all those affected by the impacts of climate change. Business stands ready to help implement the Paris Agreement and the Glasgow Climate Pact rapidly this decade in a way that is transparent, accountable, accelerates emission reductions, enhances resilience, protects and restores nature and creates a just transition for workers and protects communities.
Keeping 1.5°C within reach
We welcome the fact that governments are listening to the science, with direct reference in the Glasgow Climate Pact to recent reports by the IPCC of the impacts of climate change of 1.5°C warming, highlighting the crucial importance of avoiding the worst impacts of climate change.
The COP26 outcome highlights the importance of countries doing everything possible to stay within the 1.5°C objective, emphasizing the urgency of enhancing climate ambition and action in this critical decade.
The strong language requests governments to come forward with implementation plans to ensure any gaps are resolved. This will stimulate the huge wave of investment required and kickstart a dynamic era of innovation and transformation as companies realign their business models with achieving the 1.5°C goal.
From the private sector perspective, the number of companies setting 1.5°C-aligned science-based targets has now surpassed 1,000. The Net-Zero Standard launched by the Science Based Target initiative (SBTi) at COP26 now provides a credible and independent assessment of corporate net-zero target setting and enables companies to align their near- and long-term climate action with limiting global warming to 1.5°C. These companies and many more can collectively go further and faster with the right enabling policy environments.
While the Pact keeps 1.5°C within reach, it is clear that more efforts are needed by countries to strengthen their NDCs in line with halving emissions by 2030. The pledges announced in the past months should be included in these updated NDCs and be presented by the end of 2022, closing the current short-term gap.
Accelerating the transition to a net-zero energy system
We welcome that, for the first time at a COP, governments have emphasized the importance of phasing down coal and removing fossil fuel subsidies. However, in order to be in line with the 1.5°C pathway, coal-fired power generation must be phased out by 2030 for advanced economies, and 2040 for other countries.
In referencing coal and fossil fuel subsidies specifically, the Glasgow Climate Pact emphasizes that their continuation are among the biggest obstacles for decarbonizing the global economy at the required speed and scale. This sends a strong signal of the end of coal power and fossil fuel subsidies and will encourage business to go faster in their clean energy transition, while ensuring a just transition for workers.
Business expects coal-fired power to be phased out in order to keep the 1.5ºC target within reach, and is investing in the clean energy transition. Business also calls on governments to ensure appropriate carbon pricing signals by removing fossil fuel subsidies ideally by 2025, and put a meaningful price on carbon that reflects the full costs of climate change.
Implementation at speed and scale
If Paris created the mechanisms to raise ambition, Glasgow is the COP that moves to implementation of NDCs, pledges and business targets. The Glasgow outcome has seen major decisions on transparency and timeframes which will enable the implementation of the Paris Agreement.
For businesses, the endorsement of the 1.5°C objective, the country pledges, the phase out of fossil fuel subsidies and coal investments and the countries NDCs give a clear direction of travel.
This long-term framework provides the certitude business needs to go all in for 1.5°C and invest and scale up climate solutions at the required pace. However, governments should continue to work with businesses to address the barriers to faster decarbonization.
Creating a robust and transparent carbon market
We welcome the high-level agreement on a clear set of rules relating to the use of cooperation and market-based instruments under Article 6, a key piece for the full implementation of the Paris Agreement. These cooperative approaches have the potential to unleash huge investments by countries and companies where they can deliver the most emission reductions: this is crucial to reach the ambition levels we need for achieving the 1.5°C goal.
We are happy to see the conclusion of these complex negotiations deliver rules that will support investment that, above all, delivers raised ambition in concrete emission reductions while supporting the sustainable development of developing countries.
We look forward to the implementation of these rules in a manner that upholds the highest level of environmental integrity to enable investment that will support the achievement of the 1.5°C goal.
For leading businesses, carbon pricing policies are among the most effective and cost-efficient means of driving deep decarbonization pathways across economies. They are critical to support the urgent efforts required to drive the transition towards a net-zero future and achieving the 1.5°C goal and will help to unlock business innovation and implementation.
Accountability to raise ambition
Tracking progress is going to be key to raise accountability of countries’ NDCs, recent pledges and companies’ announcements.
We welcome the launch of the Global Stocktake and look forward to providing key inputs on concrete actions from the private sector. Tracking progress is key to determine whether countries are delivering on their climate pledges, which will help to establish it as a means to raise ambition. The design of the Global Stocktake should be evidence based, transparent and include business, as a key implementation actor.
Measurement and reporting progress is fundamental to ensure the delivery of targets. A major step forward has been the creation of the International Sustainability Standards Board (ISSB), which will provide a global standard for reporting that was very much needed. This will facilitate the widespread and consistent disclosure of sustainability and climate information from companies across sectors.
The We Mean Business Coalition and leading businesses welcome the wave of additional announcements that national governments, companies and organizations unveiled in the lead-up to, and during, COP26. These signals of ambition on climate change will accelerate the pace of global emissions reductions, and increase the likelihood that we keep 1.5°C within reach.
On behalf of the business community, the We Mean Business Coalition congratulates the UNFCCC, the UK and Italian Governments, the High-Level Champions and all those involved in reaching a negotiated settlement. We will continue to work closely with the High-Level Champions on the implementation of the revised Marrakesh Partnership to accelerate action in the real economy.
Coming out of Glasgow we need all nations, all businesses and the whole of society to go all in for 1.5°C. Forward-looking business leaders are determined to keep 1.5°C alive and recognise that every decision, innovation and investment in this decisive decade is more important than it has ever been.
The outcome today, along with the momentum and pledges made at COP26 should help to trigger the bold national policies needed to ensure we halve global emissions by 2030, reach net-zero by 2050 and keep 1.5ºC within reach.