A Truly Global Commitment: We need the private sector and world leaders to achieve net-zero

Could COP26 in Glasgow be the turning point in the fight against climate change? Banner image: Shutterstock/TR STOK
A Truly Global Commitment: We need the private sector and world leaders to achieve net-zero

This article is part of a series in which OECD experts and thought leaders  from around the world and all parts of society  address the COVID-19 crisis, discussing and developing solutions now and for the future. Aiming to foster the fruitful exchange of expertise and perspectives across fields to help us rise to this critical challenge, opinions expressed do not necessarily represent the views of the OECD.

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It’s difficult to pinpoint a period in recent history where the climate crisis has been as thoroughly articulated as it has been over the past two weeks, aligned to COP26. Each year—barring the cancelled event in 2020 owing to the outbreak of COVID-19—COP meetings bring with them a spate of specialist reporting in the media and a flurry of pledges and announcements from the private and public sector around the world. Despite an annual occurrence, their real life, on-the-ground impact has left much to be desired in previous years.

This year feels different.

COP26 has summoned an energetic urgency not only from world leaders, who burden the weight of a generation-defining responsibility in the face of an unprecedented climate crisis, but also a public yearning for impact-driven action. This has created a domino effect. Heightened public interest leads to heightened reporting from the media, be it commercial radio, broadsheet papers, news channels, current affairs magazines or others. The prospect of a future significantly hindered, if not sabotaged, by neglecting our environment has evoked the urgency we have fought years to ignite.

But while it’s encouraging to see a cross-generational clarion call for impact-led measures, I think we are all familiar with the common phrase often used to close the COP26 addresses: “more must be done”. Regardless of its frequent use, this phrase is wholly relevant and indefinitely vital. Many experts have dubbed the climate crisis as a greater challenge than the pandemic, and in many ways it’s a logical argument. While the pandemic has caused incredible loss—be it human life, economics or simply time—there is light at the end of the tunnel that offers us the reprise of normality. But this light is shaded when it comes to climate change, and it’s clear that it won’t simply disappear without drastic adaptations to the way we live our lives.

The focus has been heavily placed on the commitments of world leaders at COP26, and rightly so, but for the world to achieve its emissions target we need the private sector to step up to the plate in a collaborative effort. From an investment level, many businesses around the world will need to fundamentally change their operations, business models, approach to climate risk assessment and planning, as well as their relationships with investors and consumers.

Just as the public sector can by no rational means be apportioned the sole blame for the climate conundrum, they also cannot be tasked with solving it single-handed. Private companies are responsible for almost three-quarters of global emissions since 1988; 100 coal- and oil-producing companies account for 1 trillion tonnes of GHG emissions. Another 10-15% comes from the supply-demand of key forest risk commodities such as timber, cattle, soy, mineral ores, coffee, palm oil and rubber that are the biggest known global drivers of deforestation.

Find more on Forum Network: Investors Can—and Should—Push for Change, by Christopher James, Founder & Executive Chairman, Engine No.1

Furthermore, according to the International Energy Agency, the annual clean energy investment worldwide will need to be more than tripled by 2030, reaching close to USD 4 trillion. The mobilisation of such resources invariably needs the support of the private financial institutions of the world and the private sector as a united front. In fact banks, insurers and investors with USD 130 trillion at their disposal pledged on Wednesday, 3 November to put combating climate change at the centre of their work, and gained support in the form of efforts to put green investing on a firmer footing.

There should also be a clear outline of priorities by region and by field. Technology companies will need to deliver on the innovation front. There are already myriad state-of-the-art advancements and new technologies to counteract climate change, but we need more.

The agriculture sector has also announced some encouraging developments, with the Agriculture Innovation Mission for Climate (AIM for Climate)—a major new initiative led by the United Arab Emirates and United States, with the support of over 30 governments—officially launched on 2 November. AIM for Climate announced an “early harvest” of USD 4 billion of increased investment to accelerate innovation for climate-smart agriculture and food systems over the next five years.

The initiative aims to increase and accelerate agricultural and food systems innovation in support of climate action. While farmers and ranchers around the world face the impacts of climate change on a daily basis, nearly 25% of all greenhouse gas emissions come from agriculture. AIM for Climate focuses on enabling innovation investment in a sector that employs over 2 billion people and feeds the world’s growing population.

AIM for Climate’s list of supporters include over 30 countries from six continents as well as numerous other non-governmental agencies.

In sectors where emissions are hard or impossible to abate, and after exhausting all options to eliminate greenhouse gas emissions in the first place, companies may consider the use of carbon “offsets”. Once a company has done all that it can to reduce its own carbon footprint, the acquisition of carbon offsets allows it to go further to meet mandatory compliance requirements or to achieve voluntary commitments to net zero and carbon neutrality. The business case for sustainability has never been greater, but in fact this crossroads presents a perfect opportunity for businesses to establish a newfound thought leadership around “green” operations.

It has been an encouraging two weeks at COP26, and as the curtain falls on the Glasgow event it’s important that we not only maintain this momentum but infuse it with further urgency. I truly believe we have now entered a period where it is impossible to ignore the impact of climate change. It’s something we see with our own eyes, be it extreme whether events, droughts and more. Where it once was not, the makings of a private sector thought-leader or pioneer rests on their adaptability and commitment to play their part tackling this global issue.

Learn more at the 2021 Green Growth and Sustainable Forum, 16-18 November: 

Find more in the OECD's Annual Climate Action Monitor Helping Countries Advance Towards Net Zero:

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