The COP27 climate talks in Sharm el-Sheikh were a missed opportunity. The promise to keep global temperature rise below 1.5 degrees is almost alive, affirmed by the G20 leaders in Bali, but there is no clear plan to achieve it.
The Sharm deal does not include a commitment to phase out all fossil fuels or any guarantee that emissions will peak by 2025. Current national carbon reduction targets bring us close to a devastating three degrees increase. A powerful group of blockers, mainly governments and oil-rich companies, were out in force.
There were bright spots. By creating a new fund for “loss and damage”, rich countries are finally assuming some financial responsibility for producing most of the emissions that already wreak havoc in poorer countries. This is significant progress for a dangerously low-trust multilateral system. Let’s hope the money continues.
More governments committed to methane cuts. Improving nature and reforming food systems have been formally recognized as part of the climate fight. Y stricter measures they were proposed to prevent greenwashing.
Yet the urgency of the crisis is clearly still lost on many of our political leaders. Collectively, they are failing to achieve the ambition and action on which our planet and our future depend. This situation is not going to magically improve. Next year’s COP28 will take place in the oil-rich United Arab Emirates, and it will be hijacked just as easily.
There will be no grand superpower pact to save us: Despite small diplomatic steps between Washington and Beijing, their cooperation will be limited as long as Russian tanks are in Ukraine and the US fears for Taiwan’s security. Even with the US, Australia and Brazil back on the table, ongoing problems in the global economy and high inflation threaten to push global warming down national agendas (although tackling climate change is the best way to go). stabilize energy and food prices).
Businesses literally cannot afford to sit back and wait for politics to act together. The weather isn’t just an environmental issue: it’s the economy, stupid. Extreme flooding, heat waves, wildfires, and hurricanes cost billions. They put impoverished nations further into debt, while crippling supply chains, disrupting global trade, and destroying the workforce. Whether you’re a C-Suite executive, an investor, or the WTO, you have a vested interest in leading the world on a more stable path. There are tremendous gains waiting for those who move quickly. The shift to a low carbon economy can add trillions dollars to global growth each year and create millions of jobs.
Even when politics stalls, business can still keep going. Beyond companies getting their own houses in order, there are three immediate things business leaders can do.
The first is to advocate for much-needed reform of our global financial architecture. The idea that we will need a Marshall Plan-style intervention to finance the shift to a greener economy is beginning to gain traction. CEOs can help bring it into the mainstream.
Sharm fringes saw much discussion about Barbados’ prime minister Mia Mottley’s Bridgetown Agendacalling for climate to be fully integrated into the mandates of the post-WWII Bretton Woods institutions, which would dramatically increase the resilience and capacity of the Global South.
Professor Lord Stern has calculated that if developed countries significantly increase grants and low-interest loans through increased aid, they could attract $1 trillion of private investment to help finance the transition. Such proposals warrant urgent investigation, and companies can demand it.
Second, senior executives can do more to lead vital partnerships for change. In industry, government and civil society, we will have to collaborate on the climate in ways we never imagined. It’s starting to happen, and it’s time to increase the speed and scale of collaboration.
In Bali, we helped launch the Global Combined Finance Allianceincluding the largest climate transaction in history, mobilizing $20 billion from governments and private finance to support Indonesia’s effort to close coal mines and reach an early emissions peak.
Run by the Rockefeller Foundation (of which I sit on the board), another coalition of investors, entrepreneurs and public officials will bring clean energy to a billion people, including many in Africa.
And companies and farmers aim to dramatically scale regenerative agriculture and improve livelihoods within seven years through the regeneration10 initiative.
Third, he’s bringing more young people to the table, fast. The young activists I met in Sharm were sharp, determined and fed up with being patronized. They are powerful, as employees and consumers, as our sons and daughters, as the next generation of leaders, and as voters. Many are frustrated with the political process and are looking to the private sector to empower them in a new intergenerational alliance that will have an impact on the real economy. Here, too, companies can take action: put them on boards, panels, leadership positions, and in every room where decisions affecting their future are made.
There is no need to feel desperate, but we must recognize that our policy is not achieving vital climate action. We must find other ways to close the ambition gap, get the money moving, get business to drive urgent coalitions and make sure young people are firmly in the driving seat. Then it will be up to politics to catch up.
paul polman is a business leader and activist, and the author of Net positive: how courageous companies thrive by giving more than they take.
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