The world is at a critical point in the fight against climate change, and COP26 was considered the most significant climate talk since the 2015 Paris Agreement. During the conference, there were notable successes and some setbacks — both have implications for businesses globally.
We reflect on the progress made during the climate change conference, discuss what this means for the global chemicals and materials industry moving forward and provide insights on how to help accelerate toward net zero together.
- The Glasgow Financial Alliance for Net Zero (GFANZ).
- The Glasgow Breakthroughs on technology innovation.
- The Powering Past Coal initiative and shifting to clean power.
- Nearly 100 countries committing to cutting methane emissions.
- A commitment to end and reverse deforestation by 2030.
- H2Zero: A pledge to accelerate use of decarbonized hydrogen.
- A new requirement for net-zero transition plans for listed companies in the UK.
- Establishing a new International Sustainability Standards Board (ISSB) globally.
6. Good progress was made on Article 6, the rulebook for carbon accounting.
7. But there were also a number of setbacks:
- The US$100 billion per year climate finance target — due by 2020 — was delayed to 2023.
- Many of the new net-zero targets announced have limited detail on near-term plans to help reduce emissions, which is essential if there is a chance at limiting global warming to 1.5C.
- Questions remain regarding the follow-through and implementation, with the final call to action requesting all parties to update their Nationally Determined Contributions (NDCs) ahead of the next COP in November 2022.
8. It’s becoming increasingly clear that the institutional investment world is starting to exercise real influence through investment policy and is starting to demand increased climate focus from investee companies. Importantly, these investors are focused on private companies as much as public companies.
9. The shift to net zero is the next great industrial revolution and businesses that seize the opportunity are expected to thrive — those that don’t, may not.
The chemicals and materials industry has long been a leader in sustainable initiatives – despite public perception to the contrary – but much more should be done in the next decades to support global climate goals. In particular, cracking the code on circularity, continuing to reduce the carbon intensity of operations and diversifying energy usage to renewable sources are expected to be critical factors.