A recent UN report shows that global emissions, instead of reducing by 45 per cent by 2030, are set to increase by close to 11pc.

The Sharm el-Sheikh Climate Change Conference (COP 27) brought together more than 45,000 participants to take action toward achieving climate goals agreed upon under the Paris Agreement and the Convention. A report by 55 vulnerable countries estimated their combined climate-linked losses over the last two decades at $525 billion, or 20pc of their collective GDP.

The United Nations Framework Convention on Climate Change (UNFCCC) has calculated that developing countries would need a cumulative $5.8–5.9 trillion up to 2030 to fulfil even current Nationally Determined Contributions (NDCs). What sets COP27 apart from its predecessors is its breakthrough in setting up the Loss and Damage Fund for poor nations for the loss and devastation they suffer due to climate change.

As the chair of the Group of 77 and China, Pakistan galvanised support for establishing this fund by having it first placed on the Agenda of the Conference and then pushing for a consensus agreement. The Federal Climate Change Minister Sherry Rehman highlighted, “This is a down payment on investment in our futures and climate justice.”

The success or failure of COP27 will largely depend on the follow through for the action agenda — the commitments and aid that nations have promised

This deal was widely lauded as it acknowledges the devastating impact that global warming is already having on vulnerable countries. Mr Guterres said: “Clearly, this will not be enough, but it is a much-needed political signal to rebuild broken trust.”

According to the latest report released by the Intergovernmental Panel on Climate Change as a prelude to the conference, the ‘code red’ warning states that even if nations fully achieve their current emission reduction pledges, the planet is heading towards a 2.4C warming by the end of the century.

This is far ahead of the two-degree commitment made by all countries in the Paris Agreement, let alone the aspirational goal of keeping it within 1.5 degrees. This is a clear indication that not enough is being done.

As we stand today, nations need to decarbonise 11 times faster to get back on track. This, in effect, means countries will have to peak global emissions in just three years by FY25 and cut emissions in half in less than eight years by FY30.

Money needs to move immediately from funding fossil fuel infrastructure to investing in clean energy. Non-state actors — industry, financial institutions, cities, and regions — play a critical role in getting the world to net zero no later than FY50. They will either help scale the ambition and action needed to ensure a sustainable planet.

Another highlight during COP27 was the conversation and questions that followed up on the UN Report of High-Level Expert Group on Net-Zero Commitments. This report calls into question the promises and commitments made by the private sector.

The report offers valuable insights on how businesses can set strong, clean net-zero emissions pledges and speed up implementation. The report lays out five clear principles that anyone advocating for bold corporate climate action should closely consider.

“We urgently need every business, investor, city, state and region to walk the talk on their net zero promises. We cannot afford slow movers, fake movers, or any form of greenwashing,” said the secretary general.

When almost 1,500 companies globally committed to reducing their Green House Gas (GHG) emissions to half by FY30 and reaching net zero by FY50 in Glasgow, it was truly inspiring and considered a major win for COP26.

Unfortunately, no major progress was seen in developing a concrete action plan. It is critical that companies’ plans are credible and backed by immediate actions and transparent reporting on progress.

The first step towards reducing GHG emissions is by accurately measuring them. Around 40 countries have made periodical reporting of emissions by businesses and facilities mandatory.

Reporting creates data that is helpful when designing environmental policies and regulations and helps track the country’s overall progress. But for data on GHG emissions to be useful, the reporting mechanism needs to be transparent, easy to comprehend, reliable, and comparable.

UNFCCC has provided a broad prescription for reporting in the form of an Enhanced Transparency Framework to help countries report on their NDC. But due to its extensive scope, the unit of measurement, and reporting style, it is challenging to compare different companies’ progress aggregate data to get a snapshot summary of global collection action.

Legislatively, there is a general push toward improved documentation on emissions. The International Sustainability Standards Board (ISSB) was launched in COP26 to consolidate the voluntary disclosure landscape and help establish a global baseline of sustainability-related financial disclosure.

During COP 27 meeting, following careful analysis of the feedback on its proposed standards, the ISSB voted unanimously to require companies to disclose Scope 1, Scope 2, and Scope 3 GHG emissions, applying the current version of the GHG Protocol Corporate Standard. Formalising the reporting guidelines is a big step towards getting businesses to report on their emissions.

The success or failure of this COP27 will largely depend on the follow through on the action agenda — the commitments of climate action and aid that the nations of the world have promised.

The pathway of actions needed is quite clear; on the one hand, it requires measuring, setting future targets followed by transparency and accountability, and on the other, creating a mechanism to help companies manage the loss and damage from changing climate.

Sameen Akhund is a sustainability expert associated with Pakistan Business Council’s Centre of Excellence in Responsible Business. Anus Miftah is a climate change professional with experience in climate risk and decarbonisation strategy, and sustainable finance

Published in Dawn, The Business and Finance Weekly, December 12th, 2022