COP President Alok Sharma outlines Presidency aims for the coming year

By Amelia Beale

Yesterday, COP President Alok Sharma delivered a speech at Chatham House to provide an insight on what can be expected for the year ahead as the world prepares for COP27.

While recognising the “fractured and fractious world” we saw in 2021, Sharma began the speech by commenting on the unity of COP26, and the 197 countries who came together to recognise the stark reality of the devastation we are causing the planet.

However, with COP26 missing two key names at the table, China and Russia, Sharma made a clear push for the need for this year to increase the collective outcome. He claims that the “self-interest that helped COP26 to succeed must now drive us to nurture the spirit of global cooperation forged in Glasgow”. The bottom-line of Sharma’s speech feeds into Larry Fink’s proposition that climate action is necessary for all stakeholders — in this case, every country.

While the immediate effects of climate change, from the devastating floods to wildfires, have been seen in the past year, Alok Sharma notes the potential wider impacts of the world’s rising temperature — displacement, disruption of markets, political instability, and conflict — all of which have been reported by Chatham House’s research.

The economic disruption is the central focus as he points to climate reports such as that carried out by the Office for Budget Responsibility last year, which found that unchecked climate change could lead to public debt reaching 289 per cent of GDP. In contrast, taking transformative action now and transitioning to net zero could add only around 21 per cent of GDP to government debt by 2050. For both businesses and governments alike, he emphasises the opportunities: “Net zero is one of the clearest economic trends there has ever been…it represents an enormous economic opportunity”.

At COP26, business and finance were positioned as the drivers of change, and COP27 looks set to be similarly focused on the role of the private sector. Sharma reiterated the competitive advantage of “clean” business and laid out four key priorities that we can expect to see at COP27:

1. To ensure countries reduce emissions and go further to keep 1.5 alive.
2. Progress work and the dialogue on adaptation and loss and damage to move towards the Global Goal on Adaptation.
3. Finance these efforts by urging countries to implement the delivery plan on the $100 billion a year in international climate finance for developing countries. He claims this will also include encouraging financial firms and development finance institutions that have made commitments to deliver with integrity.
4. Push for further action across critical sectors such as coal, cars and ending deforestation.

2022 looks set to be another year dominated by COP. Here we digest the opportunities and challenges for the corporate and financial world post-COP26 and map out the key milestones in the run up to COP27.