160 World Leaders Missed COP 30, But UK Businesses Can't Afford To

Ten years on from the landmark Paris Agreement, representatives from around the world are meeting for this year’s COP (United Nations Conference of the Parties) in Belém, Brazil.  For many, the consensus reached in 2015 that enabled worldwide collaboration to reduce greenhouse gas (GHG) emissions and limit global heating is a distant memory. 

This year, approximately 160 world leaders did not attend COP 30. The Presidents of the USA, India and China, whose countries account for almost 50% of annual GHG emissions, were among those absent. Nevertheless, global investment in renewable energy and the green economy more generally provides hope that emissions will eventually peak and market forces may be the driver for change. Let’s examine how we arrived at this point and the ongoing relevance of COP for your business.

Pressed for time? Skip the full analysis and jump straight to the 5 key takeaways from COP30, what they mean for global climate action and your business.

Background to the Paris Agreement COP 21

The unequivocal scientific evidence is that if GHG emissions continued on their 2015 trajectory, then global average temperatures could reach 4°C to 5°C higher by the end of this century compared with pre-industrial times. The Paris consensus was to “pursue efforts” to limit global warming to 1.5°C and “well below” 2°C degrees by reducing GHG emissions and ultimately reaching net zero emissions by 2050. In essence, any residual GHGs emitted by the target date should be removed. 195 parties agreed to disclose their nationally determined contributions (NDC) every 5 years, outlining their strategy to reduce emissions so that progress could be scientifically tracked.

UK Law and Businesses’ Obligations Arising From Cop Commitments

In 2019, the UK Climate Change Act 2008 was updated in line with the UK’s commitment to reach net zero by 2050, using 1990 as the baseline year. At COP 29 Sir Keir Starmer set out the UK’s ambitious interim target of an 81% reduction in GHG emissions by 2035. 

Whilst UK businesses are not mandated to publish net zero commitments, many have voluntarily done so by joining, for example, the Science Based Targets initiative (SBTi). Nevertheless, several obligations do rest on organisations depending upon their size, sector and structure which help the UK government to scientifically assess national progress.

The UK had already subscribed to the first large-scale emissions trading scheme (ETS) initially set up by the EU in 2005 following agreements reached at COP 3 in Kyoto in 1997. Adopting a cap and trade principle, the UK ETS has been described as a “flagship decarbonisation policy instrument”. It applies to heavy industry, aviation and the power sectors, responsible for around 25% of total UK GHG emissions.

By capping or limiting emissions and creating a carbon price which can react to market forces, these industries are incentivised to reduce their reliance on fossil fuels by switching to renewable energy and adopting energy efficiency savings. 

Legislation has also helped to keep a track on emissions and incentivise decarbonisation: 

• The Companies Act 2006 (Strategic Report and Directors’ Report) Regulations 2013 requires companies quoted on the stock exchange to publicly disclose their carbon footprint as part of their annual reports.
• The Energy Savings Opportunity Scheme (Amendment) Regulations 2023 obliges large undertakings to conduct energy audits. This is applicable if the business has 250 or more employees and/or an annual turnover of more than £44 million and an annual balance sheet total in excess of £38 million.
• The Companies (Directors’ Report) and Limited Liability Partnerships (Energy and Carbon Report) Regulations 2018 introduced the streamlined energy and carbon reporting (SECR) framework mandating the reporting of scopes 1 + 2 emissions. It applies to companies listed on the stock exchange or with over 250 employees AND a turnover over of £36m or over £18 m on the balance sheet. 
• The Companies (Strategic Report)(Climate-related Financial Disclosure) Regulations 2022 and The Limited Liability Partnerships (Climate-related Financial Disclosure) Regulations 2022 require listed companies with over 500 employees and an annual turnover of £500 million to publish their Task Force on Climate-related Financial Disclosure (TCFD) in their annual reports. This should include disclosures on climate change-related risks and opportunities if they are material.

These policies have enabled the UK to halve its GHG emissions compared with its 1990 baseline year and ensure its Paris commitments remain achievable. 

Why Net-Zero is a Just Transition

Achieving net zero requires a transition away from fossil fuels and towards a greener future in a fair and inclusive manner. In his COP 30 speech to the world leaders who were present, Sir Keir Starmer outlined the UK Government’s drive towards a green economy and investment in clean energy, which would provide energy security and eventually a reduction in energy bills. He announced further investment for pre-assembling wind turbines in East Anglia; two offshore wind farms in the Irish Sea and a battery site in Manchester in addition to the £50 billion investment already promised. This should create 800,000 new jobs by 2030.

Speaking at the International Energy Agency (IEA) earlier this year, Sir Keir announced that the UK’s net zero sectors were growing three times faster than the economy as a whole, attracting £43 billion of private investment since Labour came to power and supporting around 600,000 jobs across the UK. 

Indeed, a “green jobs” coalition has been launched in COP 30 between governments, businesses and society following the World Resources Institute (WRI) suggestion that globally 375 million new green jobs will be created over the next 10 years. The Global Initiative on Jobs and Skills for the New Economy aims to assist investment in upskilling and social inclusion in line with climate and economic strategies. As well as mitigating climate change by reducing GHG emissions, these new skills will also assist in building resilience to adapt to the changing climate.

Furthermore, President Lula da Silva of Brazil and Sir Keir Starmer have joined forces to launch the Global Clean Power Alliance. Endorsed by other countries including Australia, Canada and Zambia, it aims to secure energy supply chains and help lower-income countries gain access to clean energy.

Meanwhile, China, responsible for 32.1% of global emissions in 2023, is seen as the “birthplace of the global green industrial revolution” and, following significant investment in the green economy, aims for its emissions to peak by 2030 and to reach net zero by 2060.

Within organisations, trade unions can also be key to a just transition with many branches already electing “green representatives” to advise members on sustainability and what this means in the workplace. Currently, “green reps” do not have the statutory right afforded to other reps to enable them to work in their elected role as part of their paid activities. Progressive companies can, of course, ensure that time is provided for this valuable role, forging collaboration between management and workers to achieve a just transition.

The Future of Net Zero

The Prime Minister acknowledged that cross-party consensus in the UK on achieving net zero to tackle climate change has gone. The absence of so many world leaders at COP and President Trump again removing the USA from its Paris commitments could signal the end of collaboration to reach net zero despite the effects of climate change being real and happening right now. Monmouth has just suffered the worst flooding for 30 years; up to 100 people lost their lives in the recent typhoon in the Philippines and Jamaica has just experienced the worst hurricane on record. Whilst climate change may not have caused these tragedies and so many others, it is making flooding, droughts and other extreme weather events more likely and more severe. 

The science is clear and the time to act with urgency is now. COPs have shown how the world can unite to reduce emissions and in so doing move away from the potentially catastrophic 2015 warming trajectory. Investment in the green economy is not an altruistic act, it should lead to more energy security, job creation and a reduction in local air pollution. Whilst the outcome of COP 30 is awaited, what is clear is that global GHG emissions must be reduced in line with the Paris Agreement whether through global commitments or the recognition that a transition away from fossil fuels makes good business sense.   

The transition to net zero is creating 800,000 UK jobs by 2030, but businesses need people who understand environmental sustainability to seize these opportunities.

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