The mood going into the 28th Conference of Parties (COP28) was one of uncertainty. Questions surrounding the heavy presence of the fossil fuel industry and the real intentions of the president were rife. With these questions came scepticism around the conference's potential to activate renewed ambition at a scale that is urgently required to keep the goals of the Paris Agreement alive.
As the negotiations conclude, and discussions around a number of key agenda items are still unresolved or inadequate, some of this uncertainty remains – notwithstanding progress on fossil fuels made in the final hours. However, this uncertainty risks masking the crucial call to action that COP28 has actually crystallised. DWF's experts have identified the undisputed conclusions that are a clarion call for action across the business community.
Tracey Groves, head of Sustainable business and ESG advisory commented:
"The core message for our clients is loud and clear: proactivity is key, so act now or risk being left behind. Behind the noise of COP28 there is an unchanged mandate for businesses to increase ambition and demonstrate leadership to keep the goals of the Paris Agreement within reach."
Three key takeaways from the negotiations demonstrate that there is certainty where it counts, and that all businesses can take tangible steps to mitigate risk and pave the way for positive action:
The Paris Agreement is still the North Star
One uncontested ambition that has resonated throughout the conference has been the Paris Agreement goal to limit global temperature rise to within 1.5°C. But the crucial emphasis here has been on urgency. Talk of a 'window' for action should increasingly be replaced by one of an arrowslit, insofar as the opportunity to make the changes required to stay within the coveted 1.5°C limit is rapidly slipping out of reach. Time is of the essence more than ever before, with calls for greenhouse gas emissions to peak in 2025 if there is any hope of remaining in line with the Paris Agreement goals.
So what does this mean for business? Crucially, the mandate is simple and consistent: urgency is key, so limiting greenhouse gas emissions within every organisation should remain a laser focus, and the pathway to net zero should be given a seat at the table alongside all other key strategic priorities at the highest decision-making level.
Non-Party stakeholders continue to have a defined role to play
The second resounding call to action is explicit within the draft text of the COP28 declaration on the Global Stocktake, being that various multistakeholder actors including businesses, civil society and financial instituions all have a critical role to play. Having been identified as key players in the global effort, businesses can make valuable contributions by demonstrating leadership with accelerated ambition backup up with clear, practical plans of action.
Nature and climate are inextricably linked
The third universally supported notion emanating from talks and in the corridors has been the vital interconnection between the climate and nature. Echoing the call for urgency, the dual crises of biodiversity loss and climate change must be addressed in a comprehensive and synergistic manner to deliver positive outcomes. In other words, the two are so deeply interconnected that failure to address one automatically precludes successful management of the other.
Again, the call to action for business is loud and clear. As adoption of the Taskforce on Climate-Related Financial Disclosures (TCFD) becomes mandatory in multiple jurisdictions worldwide, its sister framework, the Taskforce on Nature-Related Financial Disclosures (TNFD), must not be left in the shadows. Whilst not yet mandated, the direction of travel is towards mandatory disclosure in line with the TCFD. Effective reporting with true integrity is underpinned by genuine action, so businesses choosing to demonstrate their co-operation with the international message on the need for urgent biodiversity restoration must also recognise the intersection between TCFD and TNFD and respond accordingly.
The bigger picture: risk resilience and collective responsibility
From the start of COP28 the narrative was framed by a clear articulation that climate change and its adverse effects are a common concern for humanity, and in order to respect the human rights of all global citizens, the right to a clean and healthy environment must be upheld.
Through this lens, the mandate for business is again obvious: accelerated ambition to address the interconnected biodiversity and climate crises is inextricably linked to upholding internationally recognised respect for human rights. This echoes the core principles of the upcoming European Union Directive on Corporate Sustainability Due Diligence (CS3D), demonstrating the need for businesses to scrutinise environmental and human rights impacts in the context of their business model, operations and across their global value chain.
Nadine Robinson, Director in DWF's Sustainable Business and ESG advisory team commented
"With such clear connections amongst managing climate change, biodiversity loss and human rights, it is more important then ever that businesses are crystal clear of the impact of their value chain on people and the planet. With the imminent implementation of CS3D, those who start to conduct due diligence sooner rather than later will be those who are well prepared to comply, and those who effectively mitigate the risk of falling through the integrity gap."
So behind the noise of COP28, clarity and certainty prevail where it matters most for business. Those who have high ambition, act with integrity and acknowledge the need for urgency will be those who exhibit the greatest resilience in the face of adversity to come.
