In numbers: How optimistic are business leaders about COP27?

COP27 is set to begin in Sharm El-Sheikh in Egypt on 6 November. With less than a week to go, investors, businesses, industry groups and activists have all begun urging delegates to work collaboratively to keep 1.5C alive, as was the stated ambition of the Presidency last year.

The current outlook from a scientific point of view is bleak. If Governments deliver their Paris Agreement pledges in full, they will still produce emissions far beyond the level of reduction needed this decade to deliver the Agreement’s 1.5C pathway.

That is the conclusion of the UN’s climate change arm, UNFCCC, which last month published its NDC Synthesis report. The report tracks the ‘gap’ between emissions reductions to date and those set to occur in future, with the level of reductions actually needed to limit global warming in line with the Paris Agreement.

According to the report, current Nationally Determined Contributions (NDCs) made to the Paris Agreement by nations and states would put the world on course for a 2.5C temperature increase between pre-industrial times and 2100. This is provided that the plans are implemented in full and to time, which is unlikely.

However, business executives are seemingly ever the eternal optimists.

Deloitte’s “2022 Climate Check: Business’ views on climate action ahead of COP27” was published last week. The report is based on a survey of 700 executives, fielded in collaboration with Oxford Economics between August and September 2022. Respondents cover 14 major economies and all major sectors are represented in the findings.

The overall message is clear: executives are optimistic. In total, 75% of survey respondents claimed that COP27 will generate the desired outcomes to enable progress towards the Paris Agreement.

While many businesses have placed sustainability at the heart of their purpose, the Deloitte survey showcases the main driver behind corporate sustainability: economic benefits. In total, 87% of respondents claimed that investing in sustainability would generate long-term economic benefits.

Low-carbon solutions

The International Energy Agency’s (IEA) 2022 World Energy Outlook came on Thursday (27 October). Much of the report was dedicated to assessing the impact of Russia’s war in Ukraine on the global energy transition. The headline takeaway was that upticks in coal-fired electricity generation and LNG imports in some developed nations were “temporary” and, that, overall, the global transition to clean energy is accelerating and will continue to do so.

According to the report, global clean energy investment will surpass $2trn annually by 2030, up from $1.3trn annually at present. At the same time, fossil fuel investment will decrease. Power sector emissions are likely to peak in 2025, the IEA believes.

Nonetheless, the IEA is stating that the pace and scale of decarbonisation is still not likely to be sufficient for the world to align with the Paris Agreement. It foresees a 2.5C temperature pathway.

At a corporate level there is a clear appetite for sustainable investments. Almost 40% of survey respondents said they plan to accelerate sustainability efforts and investments in 2023, while 57% noted that they have invested in technologies that will help reduce operational emissions.

Moreover, 75% believe that their organisation “can continue to grow as they reduce carbon emissions”.

Some aspects of the climate crisis are inevitable and irreversible, however, and businesses are taking steps to be proactive in the areas of mitigation and adaptation.

Indeed, 69% of surveyed executives have introduced plans to execute mitigation efforts and 68% are implementing adaptation strategies.

Just transition

In the UK, MPs have previously called for the creation of a “Net Zero and Just Transition” delivery body that would oversee how the net-zero transition would benefit all areas and locations covered by the UK economy. The body should be supported by £5bn in investment to support region, with the IPPR noting that two-thirds of the UK’s 460,000 green jobs are located outside London and the South East. A coalition of trade unions urged the UK Government to create a cross-party commission focused on ensuring that the transition to net-zero by 2050 is socially and economically “just”.

However, the UK is better positioned than most nations to decarbonise in a just manner. The UK has delivered the highest rates of decarbonisation across industrial, heat and electricity sectors in the G& since 1990. Over the same period, China and India have seen their manufacturing and industrial emissions grow by 370% and 280% respectively.

Nonetheless, global businesses are retaining a focus on delivering a just transition.

According to the Deloitte survey, 24% of business executives listed the just transition as their organisation’s top priority, with a further 43% listing it as a “high priority”.

Additionally, 74% of executives who say ensuring a just transition is a top priority also note that investments in technologies to reduce emissions have been increased, compared to just 57% of all executives surveyed.

Collaboration

Finally, the survey alludes to how businesses plan to accelerate sustainable actions moving forward.

One of the key mechanisms that business leaders look set to turn to is collaboration. Many business leaders revealed that their organisation is already working with external partners to boost climate initiatives.

According to the survey, 62% of businesses were working with non-governmental organisations, 50% with academics, 44% with activist groups, 43% with national governments and 34% with other multinational businesses.

Stay in the loop with edie’s Net-Zero November

With Egypt hosting the COP27 climate summit this month (6-18 November), nations and businesses look set to reaffirm and strengthen net-zero targets and climate commitments while battling and responding to the cost-of-living crisis. As such, edie’s Net-Zero November is an entire month’s worth of content dedicated to empowering our audience to accelerate the net-zero revolution while delivering a just and green economic rebound.

Now in its fourth year, the Net-Zero November campaign is all about sparking ideas and actions which help to shape net-zero strategies and deliver decarbonisation. Through dedicated live and virtual events, online articles, business guides, podcasts and masterclasses, the month’s content will help businesses on their net-zero journey. From agreeing and setting targets through to scaling-up on-site solutions and collaborating with others – we’ve got it covered.

While previous editions of Net-Zero November have spotlighted the climate movement, this year’s programme takes an even deeper dive into achieving net-zero, covering the practicalities of reducing emissions; the need for business leadership and transparent action plans to decarbonise and the role of diverse voices, stakeholders and expertise to ensure businesses share best practice on the road to net-zero and achieving the aims of the Paris Agreement.

Find out more here.