September has been the month when the ‘road to COP26’ moved up a gear.
Shuttle diplomacy, which has been conducted behind the scenes to try and ensure that the carbon reduction commitments needed to deliver the Paris targets are agreed, morphed into public pronouncements about efforts to decarbonise.
Boris Johnson’s UN speech calling for action at COP26, President Biden’s promise to deliver $11 billion in financial aid to help offset climate change impact in developing countries and China’s pledge to halt the development of coal-fired power stations in other countries have all been met with some relief.
They’re not enough to deliver net zero or to meet Paris targets but they are a sign that compromise is possible and that COP26 is focusing minds. However, much remains to be achieved and COP26 (just six-weeks away) is still very much an unknown quantity.
One theme emerging from all of this, for both governments and corporates, is the credibility gap between what is pledged and what is delivered.
Biden’s promise for more funding is welcome but the G7 has consistently failed to deliver the $100bn in climate finance that it pledged to mobilise by 2020. Delivering that is widely seen as critical if other countries are to have the confidence that the world’s richest nations (and biggest polluters) will stick to the decarbonisation targets they make at COP26 and transition their economies to net zero.
Equally the focus on greenwashing across the global economy continues to grow. The Competition and Markets Authority has published its ‘Green Claims Code’ giving guidance on how organisations should communicate green claims to consumers and stating that it will review the claims being made by business and take action if it finds evidence of customers being misled.
The war on greenwashing is getting hotter.
Equally the Bank for International Settlements has warned of an ESG asset bubble with suggestions that ESG investments now amount to $35 trillion (or a third of assets managed by banks and investment managers), prompting warnings that a price bubble is building.
We’ve said it before and we’ll keep saying it: COP26 is just the beginning of the next phase in the ESG and sustainability movement. Once the diplomats have agreed (hopefully) new targets to cut carbon and get us back on the road to net zero, we all (business, consumers and governments) have to deliver those pledges.
Post COP will be a time of real action and also renewed scrutiny. Transitioning will require compliance, investment and commitment to change. Those who are thought to be shirking their share of the load, or even worse over-claiming and under delivering, will face significant reputational damage, censure and legal recourse.
It’s time get those plans together and deliver the dream.