In the words of former President Barack Obama: "We are the first generation to feel the impact of climate change and the last generation that can do something about it." Those words highlight why COP28 matters.
It is fair to argue that the outcome of previous international climate summits have had their controversies, with many countries, business leaders and wider stakeholders feeling the frustration at slow or no progress. However, as we approach this year's United Nations Climate Change Conference – commonly dubbed COP28 – there is still optimism around achieving certain successful outcomes.
The view in the rear-view mirror
There were vital takeaways from COP27. The establishment of a Loss and Damage fund for developing countries affected by natural disasters and the launch of the Mitigation Work Programme, which aims to increase focus on mitigation to limit warming temperatures to 1.5°C, are just two examples.
Through the windscreen
Running from 30 November to 12 December in Expo City, Dubai, COP28 marks the conclusion of the first global stock taking exercise. This means that while some measures already in place risk falling short, there is hope that governments will collaborate to devise a roadmap for credible climate action – and, with business at the forefront of climate activities, the market has a role to play to help plug the gaps.
So, what do we know about COP28? The key agenda will focus on four "paradigm shifts":
- fast-tracking the energy transition and slashing emissions before 2030 (the big picture);
- transforming climate finance by delivering on old promises and setting the framework for a new deal on finance (the process);
- putting nature, people, lives, and livelihoods at the heart of climate action (the why); and
- mobilising for the most inclusive COP ever (the so-called just transition).
What can businesses expect in practice?
It should come as no surprise that many stakeholders – especially large companies – are left unclear about their own obligations, such as disclosure requirements and strategy implementations aimed at reaching net zero. There is no doubt that corporations continue to be under heightened scrutiny from stakeholders – especially in relation to navigating the complex landscape of sustainability reporting standards. It can be difficult to know where to turn.
Hopefully, decisions arising out of COP28 will provide a clearer picture of corporates' obligations. For businesses, staying ahead of the curve will be important in reducing costs and operational disruptions that follow from changes in policy or legislation. For example, some voluntary disclosure standards have become mandatory over time, like the Task Force on Climate-related Financial Disclosures reporting, which remains voluntary in some jurisdictions, but has become mandatory in the UK, New Zealand, Japan and elsewhere.
At the same time, the general scope of sustainability reporting has expanded from climate-related disclosures to encompass broader topics, including biodiversity, social and governance considerations. There may be overlaps – but what seems clear is that the standards often focus on similar topics, just from a different vantage point.
Standard-setting bodies and regulators may be moving towards convergence as new frameworks emerge and evolve but COP28 will pose further questions regarding the way they work in practice. In this context, law firms can help by demystifying sustainability reporting and assessing its impact on the way business builds towards a better future.
We will bring you more on the big picture, the process to get there, and why it all matters in our series of COP28 articles.