The ESG Review: Mass complexities, political stand-offs, business pledges: here comes COP26

Unless you’ve been living in the most extreme self-isolation under the mother of all rocks of late, it will not have escaped your attention that COP26 is right around the corner.

In the history of public attention on climate change action, and pressure on the corporate world to drastically reduce its impact on the environment, there has never been a more significant or more anticipated forum. ESG conversations will be fixated on what happens in Glasgow in the first half of November.

As the FT’s Martin Wolf put it in what amounted to a ‘get-back-in-your-box-over-COP’ piece earlier this week on decarbonising the energy sector, “All this will require huge investments by both public and private sectors, with the latter guided by the right incentives and regulations.”

Undeniably, with COP having been postponed until this year and global voices calling for action not words, the measure of prospective success of two weeks of talking on Clydeside will be what is done as a result, largely through governments and industry working together to try to make the huge changes that are needed, and take the right approach for everyone’s sake in doing so.

The ground that will be covered at COP26, as all communicators developing content for use at and around the event will be acutely aware, is both broad and complex. Not least of those complexities is the need for net zero goals, so central to so many ESG strategies, to become more definitive by detailing lasting decarbonisation over decades with ever-reduced offsetting, as well as tackling the outer reaches of supply chains to meet Scope 3 criteria, as the FT also outlined this week.

COP26 itself has come in for criticism this week, with some corporate sponsors questioning how it’s being managed. The value of the event as a forum was always going to be held up for scrutiny, but the message about it being a ‘last chance’ to tackle the worst of climate change is resounding loud and clear.

I cannot possibly hope to cover everything required for a full preview of COP26 here, but here’s a quick glance across what has been drawn forward across business sectors.

Energy is course in the brightest spotlight, with the news that Vladimir Putin will not be trawling Airbnb for overpriced Glaswegian short-lets paramount in the headlines given gas supply woes, and the political tussle over both international supply agreements and new fossil fuel investments.

Financial services has understandably been focussed on sustainable finance and its role in supporting transformation to low-carbon economies.

The bruised airline industry is, also obviously, all over emissions reduction, but is a case in point around the need for business and governments to work together over alignment of regulation and investment in new technologies.

Meanwhile the technology sector has been noticeably quiet in pre-COP media column inches, despite the common theme of technological innovation being needed to transform all sectors and make emissions reduction more quantifiable. One exception was the Mobile UK report this week outlining the role that 5G can play in a connected, green UK economy.

And for a comprehensive summary of the enormous risks the world faces, how climate change action is required by every sector and the role that science will need to play in helping to mitigate the effects, The Lancet’s annual climate report is perhaps the best wrap-up this week.

For me, this is the bigger picture captured in one big Lancet paragraph: “The world is not on track to meet the 1·5°C limit on warming, nor the 2015 Paris Agreement limit of well below 2°C. Global greenhouse gas emissions dipped by 6.4% in 2020, but have since rebounded, and country-level nationally determined contributions fall far short of the necessary targets, with few exceptions. Australia, Brazil, China, Russia, and the USA have the greatest greenhouse gas emissions. Each remains beholden to fossil fuel companies through government subsidies and excess consumption and, in Australia's case, continually increasing exports of coal. Brazil's emissions are linked to loss of the Amazon rainforest through clearance for agriculture, which is also causing biodiversity loss of a global magnitude and destroying Indigenous communities. Targets and declarations are futile on their own; it is actions that are needed.”

When COP26 finally kicks off at the beginning of November, expect the big picture to be restated time and time again, but observers – and in communications parlance, by that we mean stakeholders – will all be looking to understand what action will be taken to begin delivering on all the pledges, and how soon it will come.

The ESG News Review is written by Steve Earl, a Partner at BOLDT.

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