The vital role corporations play in achieving the COP26 commitments

While the climate pledges launched and agreed to at COP26 in Glasgow fell short of what is needed to limit global warming to 1.5°C (2.7°F) over pre-industrial levels, the direction of travel is clear. There’s no more time for what environmental activist Greta Thunberg refers to as “blah blah blah”, and private sector commitments launched at the conference look set to reshape the agenda for businesses around the world. Now that the initial buzz has died down, we take a look at how companies can get real about COP26 in the months and years to come, and become part of the solution to climate change.

Stamping out greenwashing

One of the most interesting developments to come out of COP26 was the explicit statement by the International Financial Reporting Standards (IFRS) Foundation Trust that it will launch a new board to tackle greenwashing. This means that corporations all over the world will be held accountable for disclosing their climate risks for the first time, and will have to present them in a way that is transparent, comparable, and useful for analysts, auditors, investors, lenders and regulators.

When implemented, the new International Sustainability Standards Board’s (ISSB) sustainability disclosure requirements will mean that companies can no longer hide behind vague pledges and statements. To prepare for this change, companies need to prove real impact beyond virtue signaling – or risk falling short of expectations.

An effective sustainability program based on science

The change has already begun and action is gaining pace. In November 2021, 1,045 companies representing more than US$23tn in market capitalization responded to an urgent call to decarbonize at the pace and scale required to limit global warming to 1.5°C by joining the Science Based Targets initiative (SBTi) – a partnership between CDP, the United Nations Global Compact, World Resources Institute (WRI) and the World Wide Fund for Nature (WWF).

The companies span 53 sectors in 60 countries and have more than 32 million employees, and each of them have set emissions reduction targets in line with science, that are measurable and achievable.

The impact of this will be enormous – when the top 100 highest emitting companies comply with their pledges over the following months, the collective emissions reductions by 2030 should exceed 262 million tones, which is equal to the annual emissions of the entire country of Spain.

For many businesses, one of the most important immediate steps in the race to net zero is reducing emissions from power use – their scope 2 emissions – and this can be done by sourcing renewable energy.

The SBTi has now launched the world’s first net-zero corporate standard, which offers companies robust certification to demonstrate to consumers, investors and regulators that their net-zero targets are reducing emissions at the pace and scale required to keep global warming to 1.5°C – enabling them to prove their commitment. 

Making real change

For the first time, COP26 saw countries acknowledge that fossil fuels were the main cause of climate change.

Glasgow marks “an accelerated shift away from fossil fuels and toward renewable energy,” according to Martina Donlon, climate communications lead at the UN.

Recognizing the progress already made in reducing the costs of clean energy alternatives such as solar, the world’s governments agreed to prioritize their support fully towards the clean energy transition – and here, the private sector has a huge role to play.

According to recent figures from the Climate Group and CDP, the international non-profit groups which run RE100 – the coalition of major businesses committed to purchasing 100% renewable electricity – companies’ demand for renewable electricity has now surpassed that of the G7 countries. 

To meet global climate targets, and to remain competitive in a world driven by affordable clean electricity, it quickly needs to become the norm to power businesses with renewables – and fortunately, this is a possibility. We should know, we’re the ones providing a growing number of companies with renewable energy.

Looking to the past to create a better future

The 1980s was the decade of big everything: big hair, extreme fashion, larger than life music industries – and a big hole in the ozone. For the first time, the impact of human activity on the environment was laid bare: chlorofluorocarbons (CFCs) from refrigerators and aerosol cans were breaking apart the stratospheric layer that protected life on earth from harmful UV rays.

A landmark multilateral environmental agreement signed in 1987 – the Montreal Protocol – put an end to this. As the only United Nations (UN) treaty to have been ratified by every single country on Earth, it has led to the phasing out of 98% of ozone depleting substances compared to 1990 levels – thanks largely to the actions of innovative companies, who invested in alternative technology and rethought the way they did business. As a result, the ozone layer is projected to recover by the middle of this century.

The world back then was reacting to a global threat, and companies stepped up to the plate. Today, facing an even greater threat, we do not have the luxury to be reactive. The private sector has the opportunity to lead on climate action, and this time, being proactive will be vital.

How Atlas can help

The time for companies to act on climate change is now. In the wake of COP26, the spotlight is on corporate action, and a clean energy strategy is one of the most effective ways to meet science-based net zero targets.

Atlas Renewable Energy was conceived with sustainability at its core. It develops, builds, finances, and operates clean renewable energy projects that enable companies to power their operations sustainably.

With a range of services, from renewable power purchase agreements (PPAs) to renewable energy certificates (RECs), Atlas helps large energy consumers across industries manage their transition to net-zero and track their performance against long-term environmental and emissions targets.

To find out more about Atlas Renewable Energy’s approach and how it can align your company with net zero, please contact: contacto@atlasren.com

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