Six Outcomes Leading Businesses Want to See from COP28
COP28 offers a historic opportunity to drastically change course on climate change. Clear timelines for fossil fuel phase out, finance for nature, and a road to more ambitious NDCs are among the outcomes we need to see.
This year’s COP28 in Dubai is the most important since Paris eight years ago. The chorus of voices calling for change is growing louder, and the world’s leading companies are ready and willing to act.
At last year’s summit in Egypt, more than 80 countries backed a call to phase out all fossil fuels. Since then, there have been other signs of growing momentum, including this year’s G7, where leaders agreed to accelerate the phase-out of unabated fossil fuels by 2050. This political momentum is welcome. Now we need to see more bold leadership and collaborative action to turn targets into action.
The world is not currently on track to achieve the goals set out in the Paris Agreement. Businesses and communities are already feeling the cost and human impacts of extreme weather, and a dangerously overheating planet. We must go all in and urgently course correct for a cleaner, safer world. The message from business is clear: Don’t wait for too late.
That means, from COP28 they want to see:
Clear deadlines on fossil fuel phase out
The world of business is ready and calling for firm commitments to transform the global energy system. We Mean Business Coalition has brought together over 200 leading businesses with annual revenues representing over $1.5 trillion. A number that continues to grow as other companies add their names. Together, signatories gave their support to an open letter to world leaders ahead of this year’s COP. The message from signatories was clear: businesses want to see a full phase-out of unabated fossil fuels and a halving of emissions this decade, by tripling renewable electricity capacity to at least 11,000 GW and doubling energy efficiency by 2030.
The letter to COP leaders forms part of our Fossil to Clean campaign, which launched in September. The campaign urges governments and businesses to set an explicit end date for fossil fuels and provides a set of principles offering clear actions and timelines for fossil fuel phase-out.
This is sorely needed. Nearly 70% of business leaders expect to phase-out the use of fossil fuels in their company by 2050. But there remain substantial barriers in terms of commercial viability and infrastructure. Not all countries have favorable regulations with respect to renewables and the majority lack sufficient infrastructure to support the clean energy transition. Government regulation is either the most important or second-most important accelerator of the energy transition, according to 82% of those polled. Clear commitments from regulators would give companies the confidence to scale renewables, while minimizing risks and protecting long-term shareholder value.
Targeted action by sector and region
This year’s COP28 in Dubai sees the culmination of the first-ever UNFCCC Global Stocktake, which assesses progress made since the Paris Agreement. According to the initial findings released in October 2023, the world is off-course to stay within the 1.5°C temperature limit. However, there is still an opportunity for businesses and governments to correct their course.
Over recent months, the Coalition has led a Corporate Climate Stocktake (CCST), supported by the UN Climate Champions and Bain & Company. The Corporate Climate Stocktake examined the pace of clean solutions adopted on a sector-by-sector basis. The aim was to provide a forward-looking business perspective on progress, and outline opportunities and gaps for specific sectors, highlighting those where regulatory action is most urgent.
For example, the shipping industry works on decade long timelines for ordering new ships. Operators investing in new, less polluting, ships today need certainty that the infrastructure will be in place to support low emission fuels now and in the future. But few major ports have plans in place for how they’ll accommodate low emission ships. However, strong government regulation across those countries home to the 15 ports which account for 80% of the world’s shipping volume, would help to transform the industry and make risky investments today seem like business critical decisions for shipping companies.
From tighter commitments on cutting emissions to better information sharing, companies will be looking to governments for concrete action. Sectoral net zero targets need to be set and implemented swiftly, along with greater accountability. Governments must commit to ambitious climate policies and laws to provide the incentives for business action at scale.
A path to more ambitious NDCs
COP28 and the outcome of the Global Stocktake will inform the next round of emission reduction commitments made by governments, known as Nationally Determined Contributions (NDCs), in 2025. Leading businesses want to see progress toward more ambitious NDCs with clear roadmaps to implementation.
To meet 1.5°C targets, these contributions should include the ways by which governments and businesses can reach their climate goals by working together. Such collaboration creates an ‘ambition-loop’ that is good for the economy, good for communities, and means we reach our climate goals sooner.
Companies serious about meeting their climate targets know that the right government policies and regulations are critical to accelerate action. Loud and consistent corporate advocacy is essential to bring about science-based policy that can unlock investment and deliver action at scale.
Clear and predictable policies enable long-term planning and investment and ensure that all businesses play by the rules.
If governments and businesses work together they can develop more ambitious NDCs, support capacity building and create more granular implementation plans to support systems change.
Finance for the fight against nature loss
Nature loss represents 30% of the climate solution, but nature-based solutions, such as forests and wetland restoration, get just 3% of climate finance. Ending nature loss by 2030, and keeping global temperature increases within 1.5°C, requires $350 billion in financing annually.
This can be addressed by integrating nature targets within Nationally Determined Contributions (NDCs), and by ensuring that 30% of international climate finance is channelled to high-quality, nature-based climate solutions by 2025.
Meanwhile, companies want to take credible climate action and invest in nature-based solutions, knowing there are robust standards from regulatory bodies. This will give businesses the confidence to back the most credible and effective solutions.
Carbon credits still offer a critical tool in limiting global warming to 1.5°C and reversing nature loss. This year, we’ve seen evidence that participation in the voluntary carbon market isn’t a question of ‘either or’. A report published in October 2023 by Ecosystem Marketplace showed that companies participating in the voluntary carbon market decarbonize faster. Moreover, they are more likely to have ambitious science-based climate change targets.
At this year’s COP28, We Mean Business Coalition is working with VCMi to highlight their newly-launched claims code and build trust and confidence in how companies engage with the voluntary carbon market.
Collaboration so every business can take action
Come to the Business Pavilion for Climate Leadership this year, and you will see our bold message: “Don’t wait for too late.” Taking action today is essential to keep people safe – and it also makes business sense. Electricity generation is already transforming; renewables will become the largest source of electricity generation worldwide by early 2025. Solar, wind, battery technologies and electric vehicles will continue to proliferate, showing that change can happen fast.
We believe it’s imperative that businesses, big and small have the opportunity to seize the opportunities of climate action, from lower costs and increased resilience to cleaner air for workers, customers and communities. Around nine in ten businesses globally have fewer than 500 employees. Together, these companies represent the livelihoods of billions of people.
In view of this, we were a founding member of the SME Climate Hub, a global project to further climate action for small and medium-sized businesses. The hub offers free, practical resources to support SMEs with strategic emission reductions and climate leadership opportunities. At this year’s COP we have collaborated with the COP28 presidency on the SME Climate Hub for MENA to share innovative practices for SMEs in the host region to decarbonize.
Frameworks to accelerate action
Change happens the fastest when private and public sectors work together to spur one another on to greater ambition and action. To enable business to go faster, we need governments to get the right policies, regulations and frameworks in place. You can see our full list of policy outcomes for COP28 here. Key outcomes include:
- Progress on a non-state actor accountability framework that draws on the best of the current target-setting frameworks and accountability initiatives for business.
- To enable the transition, we need to see reform of the global financial system to support developing countries on a 1.5ºC-aligned pathway.
- Throughout negotiations and implementation, governments must maintain focus on ensuring the transition is just and equitable. In support of this, ahead of COP28 we have issued a joint statement outlining expectations for the UNFCCC work programme to establish just transition pathways.
Why we can’t afford to wait a moment longer
The climate crisis is already costing lives, homes and livelihoods. The UN estimates that an average of more than 20 million people are displaced annually due to extreme weather events. And the first study to calculate costs of global heating has found these average at least $140 billion a year.
We cannot put off action for another year; climate scientists warn that it is “now or never”. Global emissions must peak by 2025 and be reduced by at least a quarter by 2030 to keep the 1.5°C goal within reach. This will require historic levels of international cooperation, public-private collaboration and swift action sector by sector. It won’t be easy, but with enough resolve, the world will rise to the challenge.
We can’t afford to wait for too late.
Join us at the Business Pavilion in the Blue Zone to find out more about our campaigns and hear from businesses already taking action at this COP28 in Dubai.