Talking points from COP27: why and how organisations still need to act

After two weeks of intense negotiations in Sharm el-Sheikh, COP27 came to a close last week. The annual international climate summit saw world leaders and business chiefs working to further action on climate change.

Some important progress was made with the pledge to provide loss and damage funding to vulnerable nations. This is the money needed to recover the physical and social infrastructure for nations devasted by climate-change impacts, including extreme weather.

However, there were widespread warnings from credible scientists and campaigners, who sensed a lack of collaboration in making significant cuts to global emissions. Ultimately, they warn, this would mean that we are no longer on track to limit global warming to 1.5C.

In this blog, I’ll be looking at the main talking points from COP27 and what your business can do to make progress in your sustainability journey.

Why are critics unhappy with events at COP27?

Ahead of the conference, 75 per cent of executives expressed the belief that COP27 would “generate the outcomes needed to conform to the Paris Agreement”. Instead, attempts to include stronger language on the long-term phaseout of fossil fuels in the political agreement were once again unsuccessful.

Frans Timmermans, the EU policy climate chief, commented, “this is the make-or-break decade but what we have in front of us is not enough of a step forward.”

Nevertheless, more than 100 CEOs and senior executives expressed their commitment to the Paris Agreement. An open letter shared with world leaders called on the private sector to set science-based targets, collaborate to drive transparency, work with major industry and trade associations to advance alignment with the Paris agreement and help to harmonise international reporting standards.

What does this mean for you?

Decarbonisation

The most effective action your organisation can take to deliver against the goals of the Paris agreement is to reduce your carbon emissions.

At Hays, we’ve set Science-based targets, which were approved by the SBTi in February 2022. We have pledged to halve our Scope 1 and 2 and selected Scope 3 Greenhouse Gas emissions by 2026 (versus 2020) and to halve our Scope 3 emissions from purchased goods and services and capital goods by 50 per cent by 2030 (versus 2020). We’re proud say that, in 2022, our Scope 1 and 2 emissions are down 33 per cent and 77 per cent respectively and business travel (scope 3) down 75 per cent.

Don’t ignore Scope 3 emissions. These frequently account for the vast majority (70 per cent plus) of an organisation’s carbon footprint (I’ve written more about that here). At Hays we’ve expanded our scope 3 emission disclosures and reported additional categories. To achieve this, we will actively seek to work with suppliers that are on their own Net Zero journey, as well as seeking to extend the life of certain assets rather than replacing them, e.g. phones and laptops.

Carbon offsetting

The parties at COP27 were unable to reach an agreement on which projects qualify for carbon offset credits. As defined by Carbon Offset Guide, “A carbon offset broadly refers to a reduction in GHG emissions – or an increase in carbon storage (e.g., through land restoration or the planting of trees) – that is used to compensate for emissions that occur elsewhere.”

Nevertheless, credible and certified carbon offsets have a role to pay. To compensate for residual emissions that we are yet to reduce or can’t avoid, we have decided to offset all aspects of our Scope 1 and 2 and selected aspects of our Scope 3 greenhouse gas emissions by supporting carbon offsetting projects. Our CEO, Alistair Cox, has discussed how Hays has invested in this through our relationship with Climate Partner here.

Talent attraction and retention

As I discussed earlier this year, organisations have several reasons to prove their sustainability credentials. With regard to hiring and retaining employees, our own poll showed that 61 per cent of respondents would consider a company’s commitment to sustainability before applying to work there. Meanwhile, according to a study by UK-based Bupa, 52 per cent of employees would stay longer at an organisation with ESG (Environmental, Social, and Governance) commitments.

Customers are looking to understand what action business is taking on climate change. Recent research from analytics company Kantar shows that 77 per cent of respondents believe that businesses’ plans to fight climate change are not ambitious enough. A 2022 survey in the US by The Conference Board revealed that consumers of all ages showed a preference for brands that were dedicated to sustainability.

Talking points from COP27: next steps

While progress at COP27 may have been underwhelming, this is not an excuse to slow down our efforts. To quote sustainable business advisor Mike Barry: “there is no literal or metaphorical storm shelter big enough for societal or economic survival in a 2.5-3.0C world.”

The spirit of 1.5C is still strong and the world will undoubtedly be a better place the closer we stay to the guiderail. Aligned with this, consider the benefits that positive actions can have on your organisation, and reflect honestly on whether you’re doing enough at the moment to meet the expectations of your people, your clients and the wider society within which you operate.