In this section:
- What is COP26?
- What is Net Zero?
- Why is This so Important?
- What Does Good Reporting Look Like?
- Examples of Voluntary Reporting Initiatives
- Key Initiatives for Businesses to Support
What is COP26?
COP stands for Conference of the Parties and it is the decision-making body of the United Nations Framework Convention of Climate Change (UNFCCC)
A landmark Paris Agreement was adopted by 196 parties at COP 21 in Paris in December 2015(1) to limit global warming to below 2°C, whilst at the same time pursuing efforts to limit the increase to 1.5°C.
This Paris Agreement is a legally binding international treaty on climate change, within the UNFCCC.
The Paris Agreement calls for the delivery of Nationally Determined Contributions (NDCs), long-term decarbonisation plans to 2050, and financial support worth $100bn per year to countries considered most vulnerable to the effects of climate change. These three measures were due ‘by 2020’.
During what is considered the most important climate summit since, the UK and Italy will co-host COP26, the first to take place after the landmark Paris Agreement’s measures take effect and the first opportunity since then for nations to come together to review their commitments and strengthen ambition.
The Paris Agreement included a clause ‘requesting’ nations to submit enhancements or upgrades in the form of NDCs to accelerate carbon-cutting for the decade to 2030.
According to the Intergovernmental Panel on Climate Change, to limit warming to 1.5°C it will be necessary to lower carbon dioxide emissions by about 45% by 2030 (compared to 2010 levels). Even limiting global warming to 2°C will require transitioning to a carbon-neutral economy by the middle of this century.(1)
At COP24, held in Katowice Poland in December 2018, procedures and mechanisms were agreed to make the Paris Agreement operational.(1)
The reduction of carbon dioxide emissions is essential for the aims and goals of the Paris Agreement to be achieved and has become a key measurable for governments and companies to demonstrate their commitment to the reduction of global warming.
On 1 May 2019, the UK Government declared a Climate Emergency and the following month amended the Climate Change Act to establish a revised target to be Net Zero emissions by 2050.(2)
COP26 will open with a World Leaders Summit, where leaders will state their intentions for the subsequent negotiations. There will be a series of theme days focussed on key issues to highlight the activity of governments, businesses and other stakeholders and promote further ambition on these issues going forward.
Ahead of COP26, the Presidency is calling on all businesses to join a global campaign ‘Race to Zero’, the largest global alliance on net zero, to coordinate support for a zero-carbon recovery. https://racetozero.unfccc.int/join-the-race/
Whilst individual businesses cannot sign up for the campaign directly, they are invited to join an initiative which is an official partner to Race to Zero. The objective is to build momentum around the shift to a decarbonized economy ahead of COP26 with all members committed to the same overarching goal of achieving net zero emissions by 2050 at the very latest. Race To Zero Campaign | UNFCCC.
What is Net Zero?
‘Net Zero means that the UK’s total greenhouse gas (GHG) emissions would be equal to or less that the emissions the UK removed from the environment’. (2) Therefore, any emissions will be balanced by schemes to offset an equivalent amount of greenhouse gases from the atmosphere.
Why is This so Important?
Businesses are critical in the fight against climate change. With businesses facing growing regulatory pressure to reduce their emissions footprint, measurement and reporting are increasingly becoming major business matters. If businesses are to succeed in the future, they will need to seize the opportunity to adapt to a low-carbon future, helping prevent the worst impacts of climate change and future-proof business growth.
Greenhouse gas (GHG) emissions reporting is an important tool to help the UK’s transition to a low-carbon economy. It is the process by which an organisation measures and reports the volume of greenhouse gases (GHGs) emitted that are associated with that company’s activities.
Measuring emissions is the first step any business takes to managing them. Some companies have a legal obligation to report, but not all, therefore it is important to keep in mind the advantages that reporting can deliver:
- Risk management: By reporting GHG emissions as well as other environmental impacts, companies can identify and better understand their exposure to climate change risks and what can be done to mitigate against them. Reporting should be used to inform your strategy of emission reduction.
- Trust and Reputation: Stakeholders are increasingly requiring disclosure of organisational environmental impacts. As expectations of transparency continue to grow, a company’s performance can differentiate it from its peers. Reporting also provides an opportunity to show year on year improvements. Reporting should be publicly disclosed.
- Reduced Costs: Understanding and increasing the organisational awareness of consumption, spend and associated carbon emissions can help identify opportunities for improvements leading to operational cost savings. Driving behavioural change and improving insight into key areas for focus will make a more efficient business.
What Does Good Reporting Look Like?
Companies should be transparent and clearly explain their inclusions, and exclusions in preparing reports on their GHG emissions. There should be a clear explanation of the methods used and targets should be in line with Science-Based Targets (SBTi)
Science-based targets provide a clearly defined pathway for companies to reduce greenhouse gas (GHG) emissions. Targets are considered ‘science-based’ if they are in line with what the latest climate science considers necessary to meet the goals of the Paris Agreement.
Offsetting has not been highlighted here. Best practice is to limit impacts and emissions as much as possible first. Offsetting does nothing to tackle the underlying causes of emissions. Significant cuts in emissions are essential as well as the restoration and protection of the natural environment.
Examples of Voluntary Reporting Initiatives
The GHG Protocol is a widely used international reporting tool and series of standards for businesses to understand, quantify, and manage GHG emissions. www.ghgprotocol.org
The Product Standard can be used to understand the full life cycle emissions of a product and focus efforts on the greatest GHG reduction opportunities.
The GHG Protocol defines direct and indirect emissions as follows:
- Scope 1 – direct GHG emissions occurring from sources owned or controlled by the reporting business. Examples would include heating, manufacture, transportation.
- Scope 2 – indirect GHG emissions occurring from the generation of purchased electricity consumed by the reporting business.
- Scope 3 – indirect GHG emissions occurring as a consequence of a business’s activities that are not directly owned or controlled by that business but occur within your company’s value chain. Examples would include employee travel costs, waste disposal, purchased materials and services.
ISO 14064 is part of the ISO 14000 series of International Standards for environmental management. The standard is published in three parts to support organisations in regulated and voluntary programs such as emissions trading schemes and public reporting using a globally recognised standard. www.iso.org
The Carbon Disclosure Project informs investors about the significant risks and opportunities from climate change. As a voluntary initiative, businesses select the level of information they wish to disclose. www.cdproject.net
The Global Reporting Initiative is the most widely used sustainability reporting framework. Comprising a number of standards to enable companies to be transparent and take responsibility for their impacts. www.globalreporting.org/
Key Initiatives for Businesses to Support
As well as businesses stepping up and beyond what they are legally required to do, the focus is on working together to share best practice, overcome challenges and make change at scale.
The stated overall ambition of the UK Government is for all businesses to join the Race to Zero, through setting net zero targets with credible short term action plans for reaching these. In addition to the Race to Zero, a very specific way of signing up to perhaps the most relevant set of targets is to sign up to the Business Ambition for 1.5°C which is part of the Science Based Targets Initiative.
The SME Climate Hub is a useful resource , specifically designed for small businesses, through which they can commit to cutting carbon emissions by half before 2030 and reach net-zero emissions before 2050. The Hub has also published a Roadmap for businesses including SMEs outlining steps that can be taken to improve environmental performance.
As well as encouraging investments in clean energy, RE100 is an initiative for companies aiming to have 100 per cent renewable energy in the future,
Goal 13 Impact Platform: showcasing an open repository of corporate climate actions and facilitate learning and collaboration in the run up to COP26, and beyond.
Finally, Together for Our Planet is a campaign focused on UK domestic engagement run by the UK Government Department for Business, Energy and Industrial Strategy (BEIS) and the Cabinet Office.