Director of Climate Change, Principles for Responsible Investment
In the wake of COP26, we have our clearest sense yet of the urgent action needed to meaningfully address the climate crisis.
Despite the commitments we saw at COP26, we are still not on track to stay below the 1.5˚C threshold. That is not to say there was not progress from the conference. For example, agreements on deforestation and methane emissions are positive signs – but it is vital that these commitments translate into near-term action and that governments are held to account for their promises.
It is very clear that commitments from governments, combined with strong legislative and regulatory frameworks, are the lynchpin of efforts to combat the climate crisis. But we also need to see the private sector take action to address emissions. That means companies need to assess their climate impact, set ambitious, science-backed targets to cut emissions and follow through on these targets.
Companies need to assess their climate impact, set ambitious, science-backed targets to cut emissions and follow through on these targets.
Setting targets with the goal to be net zero by 2050
Target setting is one of the most effective ways of compelling action. A specific, outcome-driven, public commitment creates accountability – and it means consumers can vote with their feet if targets aren’t met. Much has (understandably) been made of the sector’s efforts to obfuscate its climate impact, but the reality of effective target setting is that it does help create genuine transparency. It also requires firms to consider how we will get to net zero and the full suite of actions needed.
A trend we have seen is companies committing to targets on very long timeframes. The world needs to be at net zero by 2050. This does not mean that we can “turn off” emissions in 2049 and expect to win this fight. We need to see companies acting now, meaning setting targets for the near team – for 2025 and 2030 – with commitments to yearly actions and updates. Not only does this put us on the right track, but it also means this generation of executives cannot kick the can down the road and shirk accountability.
A combined effort is needed to tackle the climate crisis
The reality is that efforts to combat the climate crisis cannot be realised by governments alone, we need the private sector to step up. Target setting must become the norm and failing to engage and deliver can simply not be an option. We now need corporate culture to change quickly and for consumers to support those who act in good faith and shun those who do not.