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As the world digests the outcomes of COP29 and businesses grapple to understand the ramifications for them, one thing can be certain: most of us are more confused than ever.
Though its mandate was to secure a global finance deal to accelerate action towards the Paris Agreement’s 1.5⁰ target, the optics seemed to stray far from this goal. The opening statement by Azerbaijan’s president, Ilham Aliyev, that oil and gas are a ‘gift from god’ were somewhat puzzling. Even the contentious last minute deal, apparently sealed within just over a minute, meant proceedings came to a close with a distinct lack of closure.
For those with high hopes for COP29, the outcomes may have seemed disappointing, if not difficult to understand. However, perhaps the problem is in the messaging. When it came to the UK, COP26 felt like the Glastonbury of sustainability – a convening event claiming to be ‘the world’s moment of truth’, with a catchy mantra to ‘keep 1.5⁰ alive’. Now, the complexities of the conference and the challenges it seeks to address make it feel more removed from public understanding and the general public is left with little guidance on what to do next.
Prime Minister Sir Kier Starmer’s pledge of an 81 per cent reduction to the UK’s carbon emissions, driven largely by renewable energy, is a case in point. The ambition was coupled with a message that the government would tread lightly and not ‘tell people how to live their lives’. This may be so, but many of us crave practical detail on the individual steps we can take to achieve a collective goal. This presents an opportunity for business: where the public lacks clarity, business leaders can help demystify, offering clear and direct messaging around what they are doing to meet climate ambitions and how customers can contribute.
What is clear from COP29 is that it’s time to invest. Interestingly, the goal for developed countries to provide at least $300 billion per year towards climate finance, provided the caveat that this could come from a wide range of sources, or ‘all actors’. What this means is not only a reliance on public funding but private finance, potentially handing business an even greater role in solving the climate crisis.
As well as providing an opportunity to step up, as previous COPs have taught us, the repercussions for business will only fully be felt in the years ahead. While EU businesses transition to the European Corporate Sustainability Reporting Directive (CSRD), and the enhanced reporting that comes with it, UK businesses are not immune. The detailed reporting requirements of new accounting standards, agreed to by the previous government at COP26, are on the horizon for UK corporates.
What this means for companies is an even greater investment in ESG, in the form of better data capture and considerably more resource to ensure they comply. As it becomes even more important for businesses to act and report on their role in the climate transition, so too will it be to seek further value from this work so sustainability is not seen as another risk to manage but an opportunity to become more competitive.
What’s more, in the constantly evolving landscape of sustainability regulations, going beyond compliance will be vital, or else businesses may find themselves falling behind before they’ve even fully implemented the changes required to keep up.
As delegates return from Baku and businesses make sense of the COP29 outcome, there are three key learnings they can take forward:
1. Provide consumer clarity
As sustainability becomes ever-more complex and amorphous, it’s becoming increasingly difficult for consumers to know how to make a difference. Post-COP29, businesses can help by communicating their sustainability agendas with clarity, avoiding greenwash and creating easily accessible calls to action that consumers can engage with in their daily lives.
2. Be part of the solution
However fraught the final agreement may have been, developed nations will now be called upon to meet climate finance goals. Visible cross-industry collaboration will be vital to effect real change through public-private partnerships and investment in low-carbon innovations. Better communication on organisational appetite to support the sustainable transition will attract more partners and open up more opportunities.
3. Unlock the value in ESG investment
The growing demands on companies to comply with ESG regulations and reporting standards risk it being viewed as a responsibility for Finance and Compliance teams. However, with careful navigation, sustainability can offer a brilliant palette for creative campaigns and create reputational advantage. While doing the right thing is the priority, this need not be at the exclusion of finding powerful new ways to communicate and engage audiences.
COP29 was evidence that the sustainability agenda is becoming increasingly reliant upon businesses to play their part. Get in touch with our Corporate & Responsible Business team to find out more about the sustainability communication opportunities that exist for your business.
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