As COP26 closes, can businesses step in where governments have failed?

The pledges, tar­gets and com­mit­ments came thick and fast dur­ing the first week of COP26 in Glas­gow. In those first sev­en days there was a pal­pa­ble feel­ing of opti­mism amid the pavil­ions, con­fer­ence rooms and cafes of the vast Scot­tish Event Cam­pus.  

More than 450 banks and finan­cial insti­tu­tions — worth $130tn — signed up to the Glas­gow Finance Alliance for Net Zero (GFANZ), to help fund the tran­si­tion to a low car­bon econ­o­my, while 60 of the UK’s FTSE 100 com­pa­nies joined the UN’s Race to Zero cam­paign. There was a deal to halt defor­esta­tion by the end of this decade too, backed by more than 100 world lead­ers, and 40 coun­tries agreed that coal was best left in the ground. 

Pledges unwrapped 

Then, over that first week­end, 100,000 peo­ple marched through the streets of the Scot­tish cap­i­tal demand­ing an end to ‘blah, blah, blah,’ and more urgent action against cli­mate change. Jour­nal­ists began to cut through the spin and unpack the true details of pledges, reveal­ing that com­mit­ments around coal were far from bind­ing, while there was noth­ing to stop the banks that had been so quick to talk up their mem­ber­ship of GFANZ from con­tin­u­ing to fund oil and gas explo­ration at the same time. 

Dur­ing the sec­ond week, accu­sa­tions of green­wash­ing grew, and there was increas­ing frus­tra­tion that many of the peo­ple and coun­tries most affect­ed by cli­mate change weren’t being giv­en a seat at the nego­ti­at­ing table. The feel­ing of opti­mism began to dis­si­pate. 

When the final word­ing of the COP26 agree­ment came out, few were were sur­prised that ulti­mate­ly com­pro­mise had won the day. The Glas­gow cli­mate pact was adopt­ed despite a late move by India to change lan­guage around the use of coal from “phas­ing out” to “phas­ing down”.

But the fact there was a pact allowed gov­ern­ments to claim suc­cess and a start­ing point to strength­en net-zero com­mit­ments. This despite cli­mate advis­ers say­ing the pledges will not keep warm­ing below 1.5C, while activists talked of a betray­al and a return to busi­ness as usu­al. 

Speak­ing at the CBI din­ner dur­ing the first week of the con­fer­ence, CBI direc­tor gen­er­al Tony Danker had argued that busi­ness­es were ready, will­ing and able to deliv­er a net-zero world.  

“Lead­ers every­where are start­ing to say that it is the inge­nu­ity and the finan­cial might of the pri­vate sec­tor that will get the world to net zero. To match their bil­lions with our tril­lions,” he said.  

“Well, we accept the chal­lenge. We can, we must and we will make greater com­mit­ments, accept deep­er account­abil­i­ty and raise more cap­i­tal for the task.”  

The business case 

So as the dust set­tles on Glas­gow and Egypt pre­pares to host next year’s jam­boree, where does this all leave busi­ness? 

“The poli­cies that are on the table, the things that are look­ing ahead are good… and the pledges are amaz­ing,” says Char­lie Kro­n­ick, a senior cli­mate cam­paign­er at Green­peace. But only “if any­body actu­al­ly acts on them”. 

For activists such as Kro­n­ick, pledges are worth­less if they’re not manda­to­ry. “The worst [of cli­mate change] could be avert­ed, no ques­tion. UK busi­ness­es are def­i­nite­ly capa­ble of fol­low­ing the rules, but the rules have to be there,” he says.

“Unless there are reg­u­la­tions in place that actu­al­ly set out what it means to align with [lim­it­ing warm­ing to] 1.5C and [the cli­mate agree­ment in] Paris, busi­ness­es are going to do what they’re always going to do. They nev­er walk away from the mon­ey… vol­un­tary has­n’t worked.” 

Speak­ing at COP, the chan­cel­lor Rishi Sunak indi­cat­ed he was con­sid­er­ing moves towards more manda­to­ry reg­u­la­tions, but Kro­n­ick fears progress will be slow. “GDP will be hit much hard­er by the impacts of cli­mate change than it will ever be hit by reg­u­la­tions,” he says. 

“They know it’s com­ing but busi­ness­es just haven’t got either the man­date from gov­ern­ment, or the courage to make it hap­pen now.” 

But if they don’t act, he con­tin­ues, “you end up with the inevitable pol­i­cy response, which is a mas­sive crack­down,” with the wrong kind of mea­sures, tak­en at the last minute, when you already know it’s too late. 

Science-based targets 

“It’s vital­ly impor­tant that the com­mit­ments that have been announced actu­al­ly have more sub­stance and impact than they have had pre­vi­ous­ly,” agrees Bar­ry Clavin, senior ethics and sus­tain­abil­i­ty man­ag­er at the Co-op. 

“But we’re also up for the oppor­tu­ni­ties, as well. We have to start fram­ing this via a more pos­i­tive lens, in par­tic­u­lar for con­sumers if we’re going to bring them on that jour­ney with us.” 

The Co-op mon­i­tors its full car­bon foot­print, says Clavin, and reports against sci­ence-based tar­gets, although he is mind­ful that “next year we’re already going to have to start set­ting a new tar­get because every­thing is going to move so fast. We have to be agile and respon­sive on this issue prob­a­bly more than any oth­er.” 

At COP, the Co-op, along with M&S, Sainsbury’s, Tesco and Wait­rose, pledged to cut their envi­ron­men­tal impact across cli­mate, defor­esta­tion and nature in a ‘Retail­ers Com­mit­ment for Nature’ deal with the WWF. 

Oth­er UK busi­ness­es also stepped for­ward, includ­ing Burber­ry with a new bio­di­ver­si­ty strat­e­gy that will ensure all its key mate­ri­als are 100% trace­able by 2025, and Ovo Ener­gy with a com­mit­ment to plant 1 mil­lion trees in the next 12 months. 

Call them enlight­ened, call them prag­mat­ic, but there is a grow­ing cabal of British busi­ness­es that is in no doubt that change needs to hap­pen now. But per­haps the biggest chal­lenge for UK com­pa­nies is encour­ag­ing, cajol­ing and sup­port­ing those that haven’t yet pledged to achieve net zero. 

This includes many of the UK’s 6 mil­lion SMEs. Accord­ing to a pre-COP sur­vey from the Fed­er­a­tion of Small Busi­ness­es (FSB), just 26% have a for­mal plan in place to com­bat cli­mate change with­in their busi­ness. 

“Small busi­ness­es are keen to play their part, but often don’t have the resources, deep pock­ets and ded­i­cat­ed spe­cial­ist enjoyed by their larg­er coun­ter­parts, so can find iden­ti­fy­ing and tak­ing the nec­es­sary steps a chal­lenge,” says FSB chair Mike Cher­ry. 

He calls on the gov­ern­ment to pro­vide more sup­port and prac­ti­cal action plans. This includes a Help to Green ini­tia­tive that offers vouch­ers for SMEs to spend on envi­ron­men­tal prod­ucts and ser­vices, to a scrap­page scheme that allows diesel com­mer­cial vehi­cles to be exchanged for grants that can be used towards cre­at­ing a clean­er elec­tric fleet. 

Clavin sup­ports more col­lec­tive action too, point­ing to the work of the British Retail Con­sor­tium in cre­at­ing a roadmap for the sec­tor, which is so inter­con­nect­ed. Going it alone to solve prob­lems along the sup­ply chain is futile, he says: “The col­lec­tive is the only way that we are going to get through this.”