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With 1.5°C as the limit, COP27 outcome must signal the end of fossil fuels

This article was first published in Business Green.

COP27 must drive a clear signal to businesses and governments to rapidly accelerate progress towards low-carbon economy, writes We Mean Business Coalition’s CEO, María Mendiluce

The leaders of the world’s biggest economies – the G20 – have reiterated at the highest level a message of agreement on the need to limit warming to 1.5°C and accelerate measures to deliver.

Amid multiple global crises and the related geopolitical tensions and disagreements, this clear signal is needed more than ever. It must now translate into policy actions that will drive rapid and deep emissions reductions in line with science.

1.5°C is a limit not a target. This was the clear message sent by more than 200 businesses and civil society organisations to governments at COP27 and G20 last week. Now, at COP27, the negotiators from G20 nations have a clear mandate from their leaders to push for a strong plan of action coming out of Egypt. Only this can put us on track for 1.5C.

Every fraction of a degree of global heating matters and at the current 1.2°C of warming we’re already seeing the devastating consequences of our collective failure to cut greenhouse gas emissions quickly enough. Climate change is already disrupting businesses, both in their operations and supply chains. Decisions made this week about how to cut emissions and adapt to the impacts of climate change will affect millions of people, communities, livelihoods and species around the world.

The stark reality is that existing commitments from government, even if fully translated into action, put us on track for over 2.5°C of global temperature rise. The current lack of action to deliver on these targets risks even higher temperature rise. Emissions went up again this year, when they should be rapidly falling if they are to be cut in half by 2030.

Our global energy system is right at the heart of the matter. The G20 said they “underline the urgency to rapidly transform and diversify energy systems, advance energy security and resilience and markets stability, by accelerating and ensuring clean, sustainable, just, affordable, and inclusive energy transitions and flow of sustainable investments.” This is a strong message in the time of multiple crises that the world’s largest economies recognize the urgency to rapidly decarbonize.

This week, COP27 negotiators must provide concrete details on what they will do to deliver emissions cuts. There are now over 9,000 companies, big and small, that have set science-based targets to reduce their emissions. Many of them are outperforming their targets, in the same way that the EU has announced this week that it will increase its commitment to 57% emissions reductions by 2030.

It’s critical that governments collaborate with business in pursuit of ambitious goals. Business needs certainty that as they set their emissions reduction plans, governments will do the same.

This would build on the Glasgow Climate Pact in relation to phasing down unabated coal power. Now is the time to fully align with science and drive a just transition away from all fossil fuels.We need to see more initiatives like the important financing announcement this week to support the transition of the Indonesian power sector. A coalition of countries including the US and Japan committed to mobilise $20 billion of public and private finance to help Indonesia shut coal power plants and bring forward its power sector’s peak emissions date by seven years to 2030.

There have been many calls for reforming the global financial system and ensuring flows of finance are consistent with 1.5°C pathways. This must be taken seriously. Public finance and incentives will unleash private sector investments to immediately help reduce emissions and build resilience to climate impacts. Disclosure standards in support of a 1.5°C-aligned financial system are also essential, using International Sustainability Standards Board (ISSB) as a global baseline.

Business action to transition to clean energy is already well underway. Governments can build on this right now by working with business to scale up renewables deployment, energy efficiency measures and innovation that they are already delivering.

Business needs permitting processes to be streamlined and a collective effort to skill the workforce that will be needed for this transition.

The G20 Summit has held the line on 1.5°C. But let’s be clear that it is the very least we should expect from political leaders who claim to recognise the scale of the climate crisis. We need to move to concrete outcomes at COP27 and urgent action at home from all nations.

It’s time for global collaboration and delivery of climate action at a scale never seen before. We must all – governments, businesses, investors and every part of society – bring forward our collective powers of ingenuity to scale the solutions and cut emissions. Businesses, and the people who work for them need support and incentives from governments to help them accelerate the transition to a safe and secure future.