Will Cop26 provide certainty for business?

Since the Paris Agreement was adopted, governments the world over have signalled an ever-greater commitment to decarbonising. On the eve of COP26, this now includes the Morrison governments announcement to target net zero emissions by 2050.

Data from the non-profit advisory group Energy and Climate Intelligence Unit (ECIU), shows a total of 12 countries now have a net-zero target in law as well as four countries that have the target in proposed legislation, 37 have it in a policy document, and a further 79 are discussing bringing it into law.

It’s fair to say that corporates globally, as well as here in Australia, have been well ahead of their respective governments in announcing and targeting net zero emissions. By September 2020, 1,541 major companies, with collective revenues of $11.4trn, had net-zero targets, up from 500 at the end of 2019.

One-fifth of Fortune 2000 companies had made some form of commitment to net zero by February 2021, according to an ECIU report. However, these commitments vary hugely in their scope and methodology and a large majority fail to account for scope 3 emissions, or those emissions produced by an organisation’s value chain, over which it has no direct control.

With the majority of the world’s largest corporations yet to announce a plan to decarbonise, COP26 is an opportunity for governments to provide business with both greater certainty and detail on their commitments to net zero.

To stay across all of the breaking news from the COP26 forum in Glasgow check out all the updates here.

We will provide detailed coverage of the outcomes of COP26 in our November edition of The Ripple Effect and the likely impact for how companies report and prepare for shareholder engagement in 2022 and beyond.