With a landmark step towards transitioning away from fossil fuels, the United Nations’ annual climate conference, COP28, concluded with the UAE consensus on the Global Stocktake (GST) this week. Bringing together world leaders, ministers, and negotiators from nearly 200 Parties, the Global Stocktake can now be used by countries to develop stronger climate action plans by 2025.
For the first time since the start of the UNFCCC process, the negotiation text calls for “transitioning away from fossil fuels in energy systems, in a just, orderly and equitable manner, accelerating action in this critical decade, to achieve net zero by 2050 in keeping with the science”. Whilst this is a landmark moment, there are also many criticisms of the text for numerous caveats and loopholes that could affect efforts to limit warming to 1.5oC.
Impact on Business
The decisions and agreements made at COP28 will significantly impact businesses of all sizes. The UAE consensus on Global Stocktake will influence national governments and will likely lead to the adoption of policies and regulations to reduce greenhouse gas emissions, including specific provisions on reducing nature loss.
“Whilst we didn’t turn the page on the fossil fuel era in Dubai, this outcome is the beginning of the end. (…) Now all governments and businesses need to turn these pledges into real-economy outcomes, without delay.”
UN Climate Change Executive Secretary Simon Stiell, COP28 closing speech, 2023.
This will be particularly significant for large corporations with substantial Scope 3 emissions and nature impacts. Businesses must collaborate with their supply chain partners and suppliers to establish net-zero objectives, including implementing plans to address nature loss.
With biodiversity loss and ecosystem collapse ranking among the top 5 business risks, the Global Biodiversity Framework (GBF) sets a clear path to a world living in harmony with nature by 2050, with specific expectations for business. Even though nature-related risk disclosure remains voluntary, businesses increasingly take the initiative to understand and manage their risks proactively instead of waiting for policymakers to mandate specific actions.
Nature-related and climate-related risks and opportunities are deeply intertwined, and businesses must address them holistically. Climate change disrupts supply chains, increases natural disasters, and damages property and infrastructure. Biodiversity loss reduces the resilience of ecosystems, leading to more severe impacts from climate change and loss of ecosystem services, such as: water regulation and quality, climate regulation, soil regeneration, flood control, pollination of crops, and many other functions which the global economy is dependent upon.
However, climate change and biodiversity loss also present business opportunities. The UEA Global Stocktake text signals that we are approaching a positive tipping point for the green economy: renewable energy technologies, sustainable agricultural practices, and nature-based solutions are technology-ready and increasingly financed. In addition, companies have a clearer understanding of how to improve their operations to reduce their environmental impact and risks to gain long-term resilience.
Nature-based Insights helps companies set and achieve ambitious yet practical nature-positive goals by implementing nature-based solutions with integrity: As a spin-out of the University of Oxford, we work closely with the Nature-based Solutions Initiative, Nature Positive Universities, and Oxford Net-Zero teams, applying the latest science to help businesses tackle their nature and climate risks. Find out more here.
14 December 2023