Key Outcomes from COP27
This year’s twenty-seventh Conference of the Parties (COP) was held in Sharm el-Sheikh, Egypt. This conference can only be described as a mixed bag of wins and losses. Let’s take a closer look.
Loss and damage fund
COP27 ended with a historic deal on one of the most prized climate goals: a global fund for loss and damage for vulnerable and developing nations. The decision to establish and operationalise this fund is a monumental victory and milestone for developing countries who have sought financial aid for social and physical, infrastructural damage caused by extreme weather events for almost three decades.
1.5 degrees Celsius
Under the 2015 Paris Agreement a goal to limit global warming to well below 2˚C – but preferably to 1.5˚C – compared to pre-industrial levels by the end of the century, was established. The climate science has continuously been updated and scientists from notable bodies such as the Intergovernmental Panel on Climate Change (IPCC), strongly cautioned that a 2˚C target is simply not enough and would steer the world toward increased intense heatwaves, greater habitat loss and faster rates of sea level rise. The current science shows that half a degree (2.0°C versus 1.5°C) makes the world of difference in the environmental impacts we would face and consequently the social, political and economic ramifications. In light of this, at COP26, held in Glasgow in 2021, countries agreed to continue endeavours toward reaching a 1.5˚C target.
During COP27 enthusiasm among certain countries appeared to have waned, prefaced by the fact that only 23 of the 200 countries had updated their Nationally Determined Commitments prior to COP27, a stark contrast to the 151 countries that submitted updates before COP26. This may be linked to a general impression among some countries that forgoing the 1.5˚C target will make way for more practical policymaking. Ultimately, the target has remained in place but the resolution to cause emissions to peak by 2025, as per the recommendations of the IPCC, has been removed. In addition to this, there was no clear commitment to the phasing out of fossil fuels, which was a further blow to the 1.5˚C target.
However, there is hope from business community representatives who reaffirmed their own commitment to limit temperature rise to 1.5˚C, and who urged governments to provide standards and regulations which would facilitate this transition for the private sector. More than 100 Chief Executive Officers (CEOs) and senior executives of large multinational corporations – all members of the Alliance of CEO Climate Leaders – signed an open letter to leaders at COP27 committing to work side-by-side with governments to deliver bold climate action and encourage all businesses to accelerate the Net Zero transition by setting science-based targets, disclosing emissions and catalysing decarbonisation and partnerships across global value chains.
It is widely accepted that climate change brings with it the need for adaptation to ensure less loss and damage is experienced in the long term, particularly among the world’s most vulnerable countries. South Africa has been calling for a target to increase the resilience of the global population by 50%, by 2030.
Promisingly, the COP27 negotiations resulted in an agreement on the establishment of the Global Goal on Adaptation (GGA), which will set metrics that will allow for measuring resilience to the impacts of climate change. Further work on concluding the establishment of the GGA has been rolled over to COP28.
In terms of the Adaptation Fund (established in 2001) COP26 saw countries pledging double the previously agreed upon adaptation financing. However, many pledges remain unmet, with some countries, albeit unsuccessfully, attempting to renege on the agreement during the most recent COP. Despite these yet unpaid pledges, further pledges to the tune of $230 million were made in Egypt.
A step toward regulatory alignment of reporting
Historically there has been discontent among the private sector regarding the lack of co-ordination and streamlining of sustainability reporting. CDP addressed this at COP27 by announcing its intention to incorporate the International Sustainable Standards Board’s climate standard in its questionnaires from 2024. Similarly, to the CDP’s alignment with the Task Force on Climate-related Financial Disclosures recommendations in 2018, this decision will ensure that companies are able to report data which is in line with a global baseline for climate disclosure.
Net-zero – promising parameters
COP27 saw the implementation of new International Organisation for Standardisation (ISO) Net Zero Guidelines. These guidelines provide organisations with detailed parameters on how to set and meet climate targets. Examples of these parameters include specifications that long-term net-zero targets should be accompanied by short-term goals, and that emissions can only be offset in order to reach net zero, once all efforts to reduce emissions have been undertaken. In addition, residual emissions should be sequestered using nature- or technology-based methods. On the issue of carbon credits, the guidelines strongly advise organisations to ensure that all credits are verifiable and of a high quality. The guidelines also encourage larger institutions in developed nations, who contribute and have contributed significantly to climate change, to set bold targets.
Next year’s COP will convene in the city of Dubai in the United Arab Emirates from 30 November to 12 December. This COP will include the Global Stocktake of the Paris Agreement, a process through which an assessment of the world’s collective progress toward achieving the successful implementation of the Agreement and progress towards meeting its goals, is undertaken.