COP28: Stay the course, accelerate and collaborate

In a Chapter Zero NZ webinar, Abby Foote CFInstD, Mike Burrell  executive director of the Sustainable Business Council, and Dr Charles Ehrhart discussed the governance insights gleaned so far from the 28th United Nations Climate Change Conference (COP28), which is currently underway in Dubai.

A critical platform for climate action, COP28 is likely to attract more than 100 thousand participants, topping previous attendance numbers.

Dr Charles Ehrhart, Global Head of Climate Risk, Resilience and Adaptation at KPMG and also on the Chapter Zero NZ Steering Committee, and the Climate Governance Initiative Governing board, says this year’s COP has seen the first global stocktake of how countries are progressing against their pledges to decarbonise, in accordance with the Paris Agreement.

According to the World Meteorological Organisation (WMO), October 2023 was the fifth month in a row to reach record-high global temperatures – 1.43 degrees Celsius hotter than the pre-industrial era, with 2023 recorded as the warmest year since the beginning of the 19th century. 

This reality has intensified the mood at the conference, Ehrhart says.

“The news wasn’t great. We're on track to significantly exceed the Paris Agreement's objective to limit warming to no more than two degrees Celsius,” he says. 

As we edge closer to 1.5 degrees Celsius, Ehrhart says exceeding two degrees poses significant and unstoppable risks.

“We significantly increase the likelihood of triggering negative feedback loops in the earth’s system – what we call the runaway greenhouse gas effect that we won't be able to stop which would utterly transform the world that we leave to our descendants.”

Focal points at the conference included ways to finance decarbonisation and adaptation activities, as well as supporting the decarbonisation transition. What’s clear is that collaboration is needed.

“One of the big areas of focus for that coordination has been around public-private partnerships – developing new partnership models, scaling those models up and dramatically accelerating public investment,” says Ehrhart.

The cost of forgoing investment now will mean governments will have to spend more later on.

“The cost of decarbonisation is very clearly aligning with investment in decarbonisation of our energy systems, so that we can save money for adaptation.”

Large scale philanthropy was a new topic on the agenda this year – a solution to bridge the decarbonisation innovation gap. Other newer areas included building equality for women and girls into the broader climate action picture, reinforced by the elephant in the room – the physical impacts on health and human cost of climate change, which has become a harsh and confronting reality.

“There is a sense that international consensus is crumbling,” says Mike Burrell, executive director of the Sustainable Business Council, of meeting the Paris targets.

Burrell spoke of a disquiet at the conference with leaders waking “up to the fact that every decade or so, we will go over the Paris target numbers”.

“What was interesting about that, was just how frank the panel conversations were,” he says. 

Countries are committed to staying on track to meet the Paris targets, but managing the overshoot is a challenge.

“We are not doing enough… adaptation needs to feed back into mitigation,” Burrell says.

In order to address the overshoot, he says directors need to think hard about their next steps before it is too late.

“You don't want to look at it because it looks so horrifying, but you have to look at it, and you have to work out what your Plan B is.” 

Burrell’s overarching message for directors and boards is to “stay the course, accelerate, and collaborate”.

“There are certain areas where New Zealand is leading…and transparency is coming. We are lucky we have mandatory disclosures because that puts us in a relatively strong position to be ready for what we're going to need in terms of international markets,” Burrell says. 

We are at a place now where there is a need to start putting pieces of the jigsaw back together again, according to Burrell who indicated that directors need to get up to speed quickly and figure out what the practical measures will be for their companies.

Old ways of thinking are also out the window - climate action can no longer be considered separated from biodiversity and nature, and boards and businesses need to pay heed via their climate-related strategies. 

“How do you lead into biodiversity and nature and do so in a way that's meaningful? And then, how do you link that through into climate action?”

Abbie Foote CFInstD – chair of Christchurch City Holdings, and a director of Freightways and KMD Brands, says due to the vast amount of information to digest from COP28 the key messages for directors won’t be clear until it is over.

A change of government is also a consideration for New Zealand as we await clarity on its approach to climate policy. Foote believes directors are most likely absorbing incoming messages around coalition agreements before getting their head around COP28. The latest update is that New Zealand is officially on the list of countries supporting a pledge to triple renewable energy and double energy efficiency by 2030.

“COP is so massive… the reality is that most of us will be sitting and waiting to see a bit more of what comes out, rather than reading too much into any one announcement.

“We can expect that there will be wider implications from the conference as the New Zealand contingent comes home and starts to share their insights, or are part of initiatives that are kicked off through COP.

“One of the most frequent criticisms of the New Zealand approach to climate change that I have heard from directors is some sense that we might be trading off international competitiveness by taking action more aggressively, so COP is always a really important opportunity to test how true that is,” Foote says.