Businesses Rally for Urgent Climate Action at COP28 Amidst Global Challenges”

Businesses Rally: In the bustling corridors of COP28, where over 70,000 attendees converge, the urgency to address the failure in curbing carbon emissions and accelerate climate action is palpable. Amidst disagreements on the role of fossil fuels and distractions from global conflicts, businesses are voicing their demands for more ambitious policies to propel the transition to clean energy.

The summit, the first global assessment since the landmark Paris Agreement in 2015, aims to address the pressing need to limit global warming. However, leaders find themselves grappling with geopolitical tensions, economic challenges, and a lack of consensus on priority actions.

Matt Bell, EY Global Climate Change and Sustainability Services Leader, emphasizes the imperative for accelerated action from all parties. While corporate executives highlight their efforts to reduce emissions, they underscore the limits to business initiatives without government incentives and policy shifts.

The private sector, once confined to sidelines, has gained prominence at UN summits as governments seek financial backing to drive real change. COP28 President-designate Sultan Al Jaber, also head of the UAE’s state oil company, has pledged to include the oil and gas industry in climate discussions, presenting it as a constructive approach. However, climate campaigners question Al Jaber’s appointment, expressing concerns that his ties to the oil industry may hinder progress on emission reduction.

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In October, 131 companies with a combined $1 trillion in revenue urged governments to commit to a full phase-out of unabated fossil fuels, triple renewable energy, and double the pace of energy efficiency reforms. The draft letter reveals strong support for renewable energy goals, although geopolitical tensions cast a shadow over expectations.

Business leaders stress the need to focus on decarbonizing capital-intensive heavy industries. A survey by Accenture reveals that 38% of respondents feel they cannot afford to decarbonize in the current environment. Katherine Dixon, a partner at Bain & Company, highlights the weak business case for low-carbon investments, emphasizing the need for government-created market incentives.

The business and finance sectors advocate for a global carbon emissions price to level the playing field and make the transition to low-carbon more cost-effective. While a comprehensive deal is unlikely at COP28, smaller steps, including strengthening the carbon credit trading market, can pave the way for meaningful progress.

Victoria Leggett, Head of Impact Investing at UBP, underscores the importance of a more global approach that includes a higher share of the economy. As COP28 unfolds, businesses grapple with uncertainties but remain hopeful for incremental advancements in the fight against climate change.