With COP26 having drawn to a close, the Climate Governance Initiative (CGI) can look back on these two weeks with a mix of hope and relief, thrown in with concern for the opportunities missed, and a renewed determination to play our part as board members in confronting the challenges that lie ahead. As governments struggle to find consensus, business must now take the lead.
The Glasgow Climate Pact reflects important signs of progress. The world has clearly recognised the urgency of the climate crisis, and tens of thousands of actors – national governments working with businesses, financial and other civil institutions, and regional governments – came together to set new ambitions. Some crucial taboos were broken, including acknowledging the need to wean the global economy off its dependence on fossil fuels.
We welcome the promise to end and reverse deforestation by 2030, supported by 133 world leaders representing 90% of the world’s forests, and the backing lent by financial institutions with $8.7 trillion of assets under management, who have pledged to take immediate action. But we also recognise the many significant challenges and the persistent ‘ambition gap’ that separates us from the 1.5°C target. COP confirmed that this must remain our North Star, and while the Glasgow Climate Pact has kept that target on the table, achieving it is by no means guaranteed.
Boards must lead to reach Net-Zero by 2050
The Climate Conference ended with a call for each country to raise its climate ambitions further by the end of 2022 to meet its Paris commitments. With industry and finance sharing the stage with policy makers, COP26 has made clear the role that business must play, and this leadership must come straight from the boardroom. Urgent, near-term action is what is needed now to reduce greenhouse gas emissions by half in this decade if we are to reach net zero by 2050. We, as board directors have the power to drive the necessary change and close the ambition gap that still remains.
World Economic Forum Climate Governance Principles help boards accelerate action
Despite some clear progress, the CGI shares the frustrations expressed by some regarding the failure to set fully Paris-aligned targets. We as board directors have the power to play our part in delivering on humanity’s goals and closing the still-yawning ambition gap that remains. Boards that follow the eight Principles for Effective Climate Governance published by the World Economic Forum will accelerate their company’s journey to close this gap, de-risk the transition and increase the opportunities for their business. The Principles guide boards in understanding their responsibilities, identifying risks and opportunities, as well as driving corporate strategy, aligning incentives, ensuring meaningful exchanges with key stakeholders, and effective reporting.
About the Climate Governance Initiative
The Climate Governance Initiative (CGI) is a network of national directors’ associations with an overall network exceeding 100,000 individuals across the world to drive improved corporate climate governance with a mission to facilitate the transition to a net-zero economy by 2050 or before.