The run up to COP27 and the Race to Zero

Two big climate headlines that no-one is talking about

Last week two events happened in climate news, but against a backdrop of war, inflation, and heatwaves, understandably, they got lost. However, if you’re working in sustainability you need to know because they affect the world’s climate negotiations and the rules for companies who are trying to set Net Zero targets. 

The first was the UN’s climate conference in Bonn which sets the scene for the all-important COP27 meeting later this year in Egypt. The second was a change in the rules for companies who join the Race to Zero, the initiative for companies serious about cutting carbon emissions. 

What happened in Bonn 

Quick backstory. Each year the UN holds the COP climate conference, where countries, companies, and citizens come together to assess progress on fighting climate change and work out what to do next.  

Paris (COP21) was a milestone because countries agreed to limit warming to 1.5C, review commitments every five years, and provide finance to developing countries so that they can not only cut emissions but also adapt to climate impacts. Glasgow (COP26) was another big meeting because the guidelines for implementation were agreed. Countries also committed to check back every year, rather than every five years, on their targets.  

Sharm El Sheikh (COP27) needs to be just as big. For Egypt, the key topics are how the world will implement everything that governments have been talking about and how to make progress on climate finance.  

COP27 is also important because it’s hosted in Africa, which accounts for just 4% of emissions but is among the worst hit by climate change.

So why is all this relevant now?  

Last week the UN hosted a meeting in Bonn called SB56, an important meeting because it sets the agenda for COP27.  

Here are the bits that we think matter most.

The tagline of COP27 is “together for implementation”, but the conference quickly reverted to type with countries arguing about who should make further cuts (called mitigation in UN speak) and how much focus there should be on adaptation (living with climate change).   

Most controversial was the issue of loss and damage. Developing countries believe that developed countries, which have been the highest historical emitters, should help pay for the devastating effects that climate change is already having. This could cover everything from aid when a flood, hurricane, or heatwave hits to building resilience against future disasters. Developed countries argue it’s better to cut emissions (which most are not doing!) to make the loss and damage smaller.  

Now, despite the arguments, loss and damage did not make it onto the OCP27 agenda, and it’ll be an area of contention in Egypt, so expect direct action from citizens if it’s not in the conference halls. 

After Glasgow, countries should check back annually and raise their carbon-cutting ambitions. Bonn should have started that process, but only Australia (under new climate-aware leadership), has done this so far. 

Adaptation was off, then on the agenda. Developing countries see this as crucial as the Global South is facing the worst effects of climate change but responsible for a small part of cumulative emissions. There is some hope among developing countries that with Egypt hosting COP27, adaptation will get the agenda time it needs.   

Technical discussions started on the Global Stocktake. Although one delegate dryly noted that people are trying to work out “what the global stocktake will essentially take stock of”, this will be an important process as the stocktake will work out how far promised emissions cuts are from actual implementation. The first one will be in 2023 to tee up new NDCs (the term for a country’s climate plan) for 2025.  

And finally, of course, finance. $100 billion was promised at Glasgow but so far not delivered. As a result, there will be two key areas of debate in Egypt.  

1) How to turn promises into real money and  

2) Is this figure big enough.  

$100 billion was first proposed in 2009 when the effects of climate change expected to be much, much smaller. Today the cost for developing countries to tackle climate change is estimated at trillions.  

So, at COP27, expect countries to be talking about how to raise ambitions, adapt, fund it all, and (maybe) how to help developing countries pay for the damage already being done today.  

Unfortunately, it all sounds very familiar!  

This highlights the issue that still does not get enough attention. There is almost no way we can hit 1.5C unless everyone, from countries to companies and citizens, dramatically change the use of fossil fuels starting today. 

Race to Zero 

During the Bonn conference, the UN’s Race to Zero updated its criteria and made the race much tougher. Race to Zero is a UN-backed initiative for businesses, cities, regions, and investors committed to reaching Net-Zero.  

As a race, it has a “starting line”, and participants must meet criteria and have a plan. The criteria weed out greenwash and checks for organisations focused on cutting emissions.  

This will impact companies, cities, and other “non-state actors” who have signed up and anyone new who wants to get to the starting line: 

  • Organisations must show how they will halve emissions by 2030 but now need to publish a transition plan within 12 months of joining. 
  • Members must include Scope 1, 2, and 3 emissions. This means they must account for a huge spread of emissions, including those produced by any manufactured goods when produced and used. For example, a phone company must show the emissions to make the phone, the electricity to power it, and the energy to recycle it. In short, it’s comprehensive. 
  • For financial institutions, including Scope 3 means they must include all their investments and lending. This is a huge step and will be causing some serious headaches!  
  • We may see a few financial institutions dropping out of the race, for the rest, more plans to build pension funds and lending portfolios that phase out fossil fuels as it’s hard to see how most of them can cut emissions by half by 2030. It also acts as a de facto block on most new fossil fuel investments and lending. 
  • Organisations must align their lobbying with net-zero by supporting climate policies. 

Over 7,500 companies have joined the Race to Zero (including Giki through the SME Climate Hub), and the world needs thousands more to do the same. When they do, the new criteria make it clear that they are committed and acting on getting to Net-Zero.

If you’d like to know more about how Giki can help your organisation educate and support your employees on positive climate action, get in touch.