It has long been touted as one of the most important political dates in the calendar. In November, Glasgow will host the United-Nations led global climate summit, COP26. The conference will bring 197 nations of the UNFCCC around a metaphorical table in what are set to be the most important climate change discussions and set of policy goals since the convention on climate change was adopted almost 30 years ago.
COP26 occurs at a time when awareness of the climate crisis has never been higher and there are ever-increasing global challenges posed by climate change. It is a challenging time for the world’s policy makers and they also deal with the fallout of the Coronavirus pandemic. Distribution and uptake of vaccines disproportionately impacts the Global South compared to the Global North in a very similar way to the adverse effects of the climate crisis.
At home domestic difficulties continue to unfold. The widespread failings in the energy market threaten to topple large corporates in the sector, whilst shortcomings in the supply chain are hitting the public’s purse at the fuel stations. And, as Christmas approaches, supply chain shortages threaten to impact food, drink and frozen products.
Amidst one of the most challenging policy landscapes a UK government has had to deal with in a generation, what can we expect from COP26? And how will corporates be impacted by it?
You’d be forgiven for only recently becoming aware of the UN Climate Change Conference of the Parties. However, the 26th meeting of the group has been publicised to a previously unheard-of extent. Polling suggests that the European public are becoming increasingly concerned about the climate crisis and it is impacting their decisions at both the ballot box and with their consumer choices. To this extent, engaging with the outcomes and sentiment of COP26 will be commercially imperative to many corporates.
Regulations and Legislation
COP26 will provide policy makers with the first opportunity to assess member states’ compliance with the Paris Agreement set out in 2015 in which nations committed to holding global temperature rises “well below” 2 degrees Celsius. These were pursued by non-binding national targets, which received wisdom at the time suggested were entirely inadequate. Businesses can therefore expects rafts of new stringent regulations for highly polluting industries and swathes of subsidies for environmentally-friendly/sustainable ones. To this extent it is crucial that corporates engage with the political process as early as possible, allowing them to influence the outcomes of suggested policy changes following COP26 and becoming leading lights for consumers within their sector.
With shifting regulations and legislation will come changing technologies and many corporates will look to innovative products to include within their business. Whether it be construction companies looking to more sustainable alternatives or large manufactures pivoting to plastic-free products, those which adapt in the face of a changing environment will thrive.
It is no secret that not just the UK, but global economies are suffering in the wake of the pandemic. Many think tanks and pressure groups have proposed the notion of a “green recovery” with lending and subsidies geared towards industries and companies associated with green activities in contrast to those associated with pollutants. This could be an option pursued by the Treasury and the Bank of England with favourable commercial gains for those adapting and pursuing ‘greener motives.’
More broadly, corporates can expect international governments to pursue more ambitious climate action. The general consensus amongst political leaders is that we have reached the edge of a precipice and serious coordinated action must be taken immediately. With this in mind, corporates willing to embrace emission reductions, greener technologies and climate change action will be the beneficiaries of COP26.
If you’d like to discuss how you can prepare and respond to proposals around COP26 then please do get in touch with us today.