CoP 26 came to a close on 13th November 2021 after a one-day extension to ensure consensus was reached for the final outcome document. The Final CoP26 Glasgow Pact does not mention any word on the business although private companies and businesses contribute 70% of the world Green House Gases. In fact, the Paris Climate Change and the ensuing mechanism envisioned in the process does not have platforms where businesses can be part and parcel of the process.
COP26 in Glasgow achieved some deals in cutting methane emissions, accelerating forest cover and phasing out coal in South Africa. All these deals are private deals nations have entered on behalf of their own private sectors. The trickle-down effect of these deals will be the development and deployment of policy and regulatory frameworks to ensure that climate action moves from ambition to action. As such businesses need to align and establish coherence with policy including set goals for reaching net-zero by mid-century.
Raising climate action requires companies and businesses in general to reimagine their values and operations including not limited to designing strategies that align with climate action. First and foremost, businesses need to mainstream SDGs into their value creation models as well as developing robust and specific action to lead from the front as they await regulations and supervisory instruments. It’s imperative for businesses to establish sustainability departments that will lead this process. Also, establishing sustainability champions at each and every department will go a long way for businesses to appreciate the value of Environmental, Social and Governance (ESG) frameworks as a primary tool for building future proof businesses.
As part of this transition, businesses need to form alliances and partnerships for scaling innovative practices where knowledge is exchanged and learning is peer led, consequently reducing this transition cost dubbed as the “green premium”. Business has to lead where others have failed and its time for deployment of market mechanisms and other incentives to ensure SDGs are not only achieved but also lead to equality, social justice, including raising people out of poverty. Governments the world over are raising ambitions and it’s time we see some actions from businesses. In Kenya, Nairobi Stock Exchange (NSE) has already created the ground for some action by the release of the ESG Guidelines and given the market one year to align for incoming regulations by the Capital Markets Authority. This comes just after the Central Bank of Kenya released the Climate related guidelines on financial risk. The regulators are responding and its time the business should start augmenting.
The future is not negotiable. And the solutions are right in front of us. It is upon business leaders to drive the uptake of tried-and-tested solutions—including the circular economy, regenerative agriculture, modulation, and sustainability which could reduce global emissions by 39%. This is according to the Circularity Gap Report 2021, which finds that focusing on the energy transition alone is not enough if we are to avoid climate catastrophe.