Was COP a flop? Like anything, it depends on who you talk to. There wasn’t an agreement on a much-needed phase out of fossil fuels, but we are closer than we’ve ever been before.
Notably, it was the first time all signatories to the Paris Agreement agreed to take action on coal, oil and gas. This can be partially attributed to COP28 President-designate Sultan Al-Jaber, influencing his pals from other petrostates (also, leaked documents from industry body OPEC indicate they’ve seen the writing on the wall).
The final text included language around “transitioning away from” fossil fuels and “phasing-down” usage. Which leads me to the first of my six key takeaways.
Speed up action
Each of the ‘parties’, including Aotearoa New Zealand, were required to submit a report card on progress made toward meeting their obligations under the Paris Agreement. These will be scrutinised in the New Year with recommendations for improvement discussed at COP29. However, we already know Aotearoa New Zealand is not moving fast enough in terms of reducing its emissions, and scaling up renewable energy is key. As a consequence, businesses will likely come under pressure to hasten their transition to net zero and ensure they’re accurately reporting progress.
Focus on emissions
Further to the above, lenders, investors and insurers will place increasing importance on Scope 3 emissions that occur in their upstream and downstream activities. These financial institutions will expect businesses to work collaboratively on emissions with suppliers across their value chains.
If they haven’t already, companies should start looking at their sustainable procurement policies i.e. the goods and services they must purchase to run their operations, like cleaning products, IT equipment and office furnishings.
Not only does sustainable procurement reduce emissions and environmental impact, but it saves money in the long term and supports suppliers doing the hard mahi around sustainability.
Embrace nature-based solutions
Climate-change and biodiversity have often been treated as completely separate issues in the past (bonkers, huh?) However, at this year’s COP, nature-based solutions were explicitly acknowledged in a joint statement on nature and climate by the COP28 Presidency and Convention on Biological Diversity (hoorah!).
Hundreds of millions of dollars were also committed to conservation and regenerative projects including USD$157 million from the Bezos Earth Fund and USD$133 million from the Green Climate Fund. This should serve as a clear indicator, that a mono-focus on emissions will no longer cut the proverbial mustard for governments or businesses.
Shortly before COP28, the Taskforce on Nature-related Financial Disclosures released a comprehensive guide for companies and financial institutions to assess and disclose nature-related impacts, dependencies, risks and opportunities. It’s recommended reading for any business committed to the protection of people and planet, and wanting to stay ahead of the curve.
Be accurate and transparent
COP28 saw heightened discussion around greenwashing where organisations make misleading claims about their environmental performance. There were strong calls for accurate and transparent reporting and third-party verification through government-endorsed, non-profit ecolabels such as Eco Choice Aotearoa, which use International Organisation for Standardisation (ISO 14024) guidelines.
The European Union is ahead of the game on this one, with its Green Claims Directive seeking to mandate this approach.
And in welcome news, ISO and International Financial Reporting Standards (IFRS) teams are collaborating to ensure much more cohesion across standards and requirements.
Consider biodiversity credits
Carbon offsets should not be a long-term strategy. A former veteran of the International Monetary Fund (IMF), Dr Ralph Chami, warned the closer we get to net zero, the less valuable they’ll become. Instead, companies must commit to real operational changes and should consider biodiversity credits such as those proposed by Māori start-up Hinemoana Halo Ocean Fund. The initiative will offer ‘credits’ to businesses that will go toward coastal and marine conservation and restoration, while providing a “just transition” for indigenous communities in Aotearoa New Zealand and the Pacific so they can dedicate themselves as full-time kaitiaki (guardians).
Finally, the need for radical collaboration was abundantly clear, and perhaps is an area where Aotearoa New Zealand can lead by example. The Sustainable Business Network is spearheading several working groups, including one focused on facilitating and scaling repairability, with a number of businesses traditionally considered to be ‘competitors’, working together on solutions.