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The ESG lessons we learned from COP28 – what to expect in 2024
February 7, 2024
The recently concluded COP28, held in Dubai, brought nations from around the world together to address the urgent climate crisis. The commitments made, the challenges we continue to face, and the aspirations outlined at COP28 provided a lens through which we can gauge the trajectory of global climate action. While laden with promise, the outcome of COP28 also exposes the fault lines in the collective response to one of humanity’s most pressing challenges.
Lessons from COP28
As the world reflects on the commitments, challenges, and aspirations outlined during COP28, valuable lessons have emerged, shaping the path of climate action. Here are the key learnings, from positive steps to areas of concern. From the nuanced analysis from the International Energy Agency (IEA) on renewable energy and emissions reduction commitments to the significance of the ‘global stocktake’ (GST) – these lessons provide valuable insights into the complex landscape of climate negotiations. As businesses prepare for a transformative 2024, the implications of COP28 – encapsulated in the UAE consensus – set the stage for a global transition away from fossil fuels.
Positive steps, but not enough
The International Energy Agency’s (IEA) analysis painted a picture of the pledges made at COP28. While commitments to boost renewable energy, enhance energy efficiency, and reduce emissions are positive steps, the IEA warned that these efforts might fall short of meeting crucial climate targets. Despite countries pledging to triple global renewable power capacity and double energy efficiency improvements, the IEA’s analysis suggests that these commitments might only address 30% of the emissions gap needed to achieve the ambitious net zero emissions by 2050 scenario.
Methane reduction and fossil fuel industry commitments
One notable achievement of COP28 was the commitment made by 50 oil and gas companies to reduce methane emissions and eliminate routine flaring by 2030. This marked a significant step toward curbing emissions from a primary sector. However, the IEA’s analysis provided a sobering perspective, indicating that even if all pledges related to renewables, energy efficiency, and methane reduction are fulfilled, more might be needed to achieve the progressive net zero targets to combat climate change.
COP28: the global stocktake
The draft final agreement, known as the global stocktake, faced criticism for not explicitly addressing the phasing out of unabated fossil fuels. The absence of a clear commitment to reducing reliance on fossil fuels raised concerns among climate advocates.
Despite renewed commitments to renewable energy and sustainability, the absence of well-defined interim steps and the potential for procrastination was highlighted. While a crucial aspect, the global stocktake faced challenges in meeting the urgency demanded by the global climate crisis.
What can businesses expect this year?
As the world grapples with the outcomes of COP28, companies are poised for a significant year in 2024. The landmark deal reached at COP28, the UAE consensus, has set the stage for a global transition away from fossil fuels, marking a pivotal moment in the fight against climate change. While the agreement has been met with both praise and scepticism, its implications for businesses worldwide are undeniable. Delving into the key takeaways from COP28, let’s explore what businesses can anticipate in the ever-evolving landscape of environmental sustainability, regulatory shifts, and the imperative for corporate responsibility.
Increased climate financing
Businesses should anticipate an emphasis on climate financing, with expectations for developed nations to substantially contribute. In 2024, the focus may shift towards establishing concrete strategies to ensure climate financing aligns with the needs of vulnerable businesses and supports a just and equitable transition.
Addressing concerns about methane curbs
Companies need to be aware of the concerns raised by countries like Paraguay about the impact of methane curbs on their economies. This year, negotiations may focus on developing strategies that address economic concerns while aligning with environmental goals.
Expect discussions on supporting industries that are heavily reliant on specific practices, to transition toward greener alternatives – without compromising economic stability. Businesses should stay informed about potential policy changes and adaptations required in their operations.
The global stocktake and unfinished business
The challenges with unfinished business and decisions at COP28 indicate the complexity of addressing technical aspects alongside primary climate goals. In 2024, there may be renewed efforts to streamline processes and ensure that the global stocktake comprehensively evaluates climate actions. The focus might shift toward addressing technical matters, ensuring that critical decisions are not postponed, and facilitating a smoother implementation of climate goals.
Equity, climate justice, and differentiated contributions
Concerns raised by various countries, including India and China, underscore the importance of equity and climate justice in future climate negotiations. Firms should recognise this and acknowledge that the differentiation in contributions between developed and developing nations will be crucial to discussions. We should anticipate dialogues aimed at finding a balance between both. The talks may revolve around recognising the right to development while ensuring that all take determined climate action.
The takeaways
COP28 has left us with a mix of accomplishments and hurdles. Reflecting on the lessons learned, the need for increased ambition, concrete actions, and robust climate financing becomes evident. This year, businesses can expect a continued push for this, and each industry must collaborate to address concerns and create a solid framework that propels businesses toward a sustainable and resilient future.
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TAGS: Sustainability & ESG
POSTED BY: Zach Price