In recent weeks, there has been a lot written about the COP26 United Nations Annual Climate Change Conference, which was held in Glasgow, Scotland between October 31 and November 13, 2021. The central goal of the COP26 climate summit was to enable and encourage the parties (193 parties, including Canada, the U.S., China, and the European Union) to align on actionable steps that will put the world on a pathway towards global net zero emissions by mid-century and keep the goal of 1.5 degrees Celsius of warming within reach. There were many promises made at the COP26 climate summit, from countries and private-sector actors alike, but upon conclusion of the conference it remains clear that fundamentally keeping that target (1.5 degrees Celsius of warming) alive remains an uphill battle and doing so requires countries and private-sector actors to urgently put forth ambitious new climate programs and policies, including technological advances.
In light of the foregoing, our expectation is that it will be critical for many players - including investors, those seeking capital, and those seeking to consummate transactions - to have strong climate change initiatives in place to seek to ensure long term sustainable growth and to seek to achieve the ambitious climate change goals set out at the COP26 climate summit. It will become increasingly imperative that business in particular take the climate change challenge to heart. As such, we will highlight, over the next series of posts, some of the key takeaways from the COP26 climate summit, including some of the significant global and multi-participant action items and frameworks that have been developing as part of the push for global alignment on climate change.
Global Goals
The Paris Agreement is an international treaty on climate change. It was adopted at the COP 21 climate summit in Paris on December 12, 2015 and entered into force on November 4, 2016. Currently, there are 193 parties to the Paris Agreement (including Canada, which ratified the Paris Agreement on October 5, 2016). Its goal is to limit global warming to well below 2, preferably to 1.5 degrees Celsius, compared to pre-industrial levels (the "Global Goal").
Global Targets
To achieve the Global Goal, the consensus is that global emissions must fall by 50% by 2030 compared to 2010 levels and we must reach net-zero emissions by 2050 (the "Global Targets"). Businesses from all sectors are encouraged to commit to aligning their business plans with the Global Targets. Initiatives such as the Science Based Targets initiative ("SBTi") help drive ambitious climate action in the private sector by enabling companies to set and achieve science-based emissions reduction targets in line with the Global Targets.
Science Based Targets initiative
The SBTi provides companies with a blueprint on how to bring their climate plans in line with the Global Targets.
More than 2,000 businesses and financial institutions are working with the SBTi to reduce their emissions in line with climate science.
Global Campaigns
There are several global campaigns attempting to align company, city, and investor climate strategies and operations in an attempt to meet the Global Targets. Two such campaigns are the UN-backed Race to Net Zero Campaign and the UN Global Compact, both of which have received substantial support from public and private-sector actors alike.
UN-backed Race to Zero Campaign
Race to Zero is the UN-backed global campaign rallying non-state actors – including companies, cities, regions, financial and educational institutions – to take rigorous and immediate action to halve global emissions by 2030 and deliver a healthier, fairer zero carbon world in time.
There are currently 5230 companies, 67 sub-national regions, 1049 cities, and 1039, educational, 441 financial, and 52 healthcare institutions in the Race to Net Zero.
UNGC Business Ambition for 1.5 Degrees Celsius
The United Nations Global Compact ("UNGC") is a voluntary initiative based on CEO commitments to align company strategies and operations with 10 universal principles on human rights, labour, environment and anti-corruption, and take actions that advance societal goals.
There are currently 164 UNGC participants in Canada.
Key Takeaways and Action Items on Climate Change (Part II)
In the next post we will examine the frameworks and blueprints that have been agreed to by business at and following the COP26 climate summit.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
