COP28 Insights: What Does This Mean for Your Business?
COP28 wrapped up last week after an unexpected extension for final negotiations. Despite the controversial context of this year’s conference, global leaders and essential stakeholders from public and private sectors made substantial agreements to support a sustainable and low-carbon future.. Here’s everything you need to know about the outcomes of COP28 and key takeaways for your business.
COP28 Key Outcomes
The first Global Stocktake, or the first progress report on global actions toward the Paris Agreement, was the key focus for this year’s conference. The resulting outcome, the UAE Consensus, establishes the commitment to a just and orderly transition away from fossil fuels in global energy systems to reach net zero emissions by 2050. This is not a clean break from fossil fuels, but it is a monumental step toward their inevitable phaseout. Stated measures to move away from fossil fuels include efforts towards the phase-down of unabated coal power and phasing out inefficient fossil fuel subsidies.
To continue to meet growing energy demand, however, leaders set a new target to triple renewables and double energy efficiency by 2030. Additionally, countries have been encouraged to submit economy-wide Nationally Determined Contributions (NDCs) outlining their climate action and adoption plan. This includes the intention of peak global emissions by 2025, then appropriate reductions to reach net zero by 2050.
For regions experiencing the onset of climate change, negotiators made the historic decision to create the Loss and Damage Fund on the first day of COP28. Parties have agreed on the operationalization of the fund and funding arrangements to support developing countries with recovery, rehabilitation, and reconstruction of loss and damages brought about by the climate crisis. The fund has since received $792 million of early pledges from 19 countries.
COP28 also instated the Global Cooling Pledge, which states collective global targets to reduce cooling-related emissions by 68% by 2050, significantly increase access to sustainable cooling by 2030, and increase the global average efficiency of new air conditioners by 50%.
Following through on COP28’s commitment to inclusivity, the presidency institutionalized the Youth Climate Champion role, requiring all future COP Presidencies to appoint a Presidency Youth Climate Champion. The goal is to ensure continued and expanded youth engagement in climate action as well as throughout the UN Framework Convention on Climate Change (UNFCCC) activities.
The Impact on Business
There was significant private sector participation with more than 1300 CEOs in attendance, representing over 100 countries. Businesses and financial institutions engaged in policy discussions, showcased their solutions, and forged partnerships through numerous events adjacent to the conference. One standout initiative is the UAE’s $30 billion climate fund launched with top financial services companies to invest in clean technology, with some of the funding directed to the Global South.
The outcomes of COP28 suggest a global transition to a more sustainable and low-carbon economy which presents both challenges and opportunities for businesses.
Challenges
Increased regulation: The commitment of governments to a clean energy transition may reflect increased requirements for emissions reporting and corporate plans for reducing carbon emissions.
Market shifts: Through incentives for renewable energy and the phasing out of fossil fuels, we can expect clean energy alternatives to become more accessible while unsustainable energy sources, like coal, may become limited and more expensive.
Opportunities
More incentives: With COP28’s commitment to triple renewable energy capacity and double energy efficiency, businesses may expect incentives to innovate and adopt renewable energy alternatives. As for the Global Cooling Pledge, this commitment offers manufacturing and construction companies potential new standards or market opportunities in efficient cooling technologies.
Adaptation resources: The Loss and Damage Fund may materialize as resource opportunities for businesses to adapt to climate change and build resilient systems in the future. Through the negotiations on agriculture, food, and climate as well as the intersection of climate and health offer funding and other opportunities to businesses focused on tackling agricultural emissions, food security, and health issues exacerbated by the climate crisis.
If you are ready to seize climate opportunities, the Uplift Agency can support you in going beyond compliance to creating a holistic ESG Strategy, inclusive of transparent reporting to meet your unique business needs. Our team of experts will not only help you develop your strategy but help implement it along the way.
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Uplift builds strategies, programs, and communication campaigns that advance ESG in workplaces, supply chains and communities.
We know how to navigate the road ahead because we’ve already been down it – 90 percent of our team has led environmental or social programs in corporations or nonprofits. Because ESG is all we do, our services are more comprehensive and integrated than most firms.
