The time has come to walk the talk of climate pledges
The 28th COP culminated last week in a thriller negotiation on the global stocktake - the first collective assessment of progress on global warming mitigation since the Paris Agreement in 2015. Greenhouse gas emissions and coal burning reached a new record in 2023 and while a vast majority of countries, including the European Union, backed a push to phase-out coal, oil and gas, Saudi Arabia and thousands of oil lobbyists fought hard against any mention of fossil fuels.
The text that was eventually voted in Dubai’s air conditioned Expo City stated for the first time in 30 years of climate summits (!) the need to transition away from fossil fuels, but in weak terms penned by Prof Mike Berners-Lee as “the fossil fuel industry’s dream outcome, because it looks like progress, but it isn’t.”. More optimistic commentators want to see in this UAE consensus the true ‘beginning of the end’ of the fossil fuel-driven world economy. More oil and gas will remain in the ground if there’s less capital directed to finance their extraction and if their demand is destroyed by shifts to clean power systems, battery-powered vehicles and other decarbonisation initiatives.
Participants to the conference have described a general atmosphere of self-congratulation of political and business leaders about their ambitious climate targets. This is supported by the growing reach of the Science Based Targets initiative. SBTi targets and commitments cover more than a third of the global economy by market capitalization - and two thirds of Combient network companies.
However, a recent BCG study has shown that only 14% of the companies it surveyed have managed to reduce their emissions according to their target trajectory during the past 5 years. This stagnation stems from external factors such as tough macroeconomic conditions and capital constraints, coupled with internal hurdles such as competing priorities, leadership misalignment, unclear initiatives or hiring challenges.
Companies leading the decarbonisation actions have been able to reap both financial and non-financial benefits from their competitive advantage. These include increased revenue, lower operating costs, higher valuation, reputational value, greater regulatory compliance, improved attraction and retention of talent, and tax savings. Key enablers for successful decarbonisation seem to be the adoption of digital solutions to measure and report emission data more accurately and more effectively as well as collaboration across the value chain.
This makes sense, as the vast majority of emissions of most companies lie outside of their direct control and their reduction requires proactively engaging in joint initiatives with suppliers and customers. These complex initiatives often require a neutral facilitator and orchestrator to flourish - a role perfectly suited for Combient Pure.
