Reflections on COP27 and the road ahead

Coming away from COP27 in Sharm El Sheikh, Egypt, the vital issues of climate change and its impact have never felt more real to me. It was my first time seeing the events in person which bring together representatives from policy, government, communities, climate science, business, NGOs and young people. It made me feel worried, energized and humbled in equal measure.

There are many insights written on COP27, what it did or did not achieve, and where we go from here. I’m taking a different lens to look at events in Sharm El Sheik, grounded in my 25 years of business strategy experience.

As business executives – whether you are in HR, procurement, marketing, finance, logistics or strategy – we need to lean-in, bringing and building our skills to embed sustainability in the core of our organizations. 

COP discussions, both inside the negotiations and on the sidelines, bring home the complexity, scale of the challenge and the opportunity of sustainability-led transformation. The bottom line is we won’t have a net zero transformation without policy, business, finance and societal transformation grounded in science.

Five issues stood out to me:

1. There is a distinct asymmetry between those that hold decision-making power and those that will be impacted the hardest by the challenges of climate change in every way we can. Issues at COP included the global north/south divide on finance, limited gender-inclusive negotiating teams and limited youth representation. Diverse voices create more inclusive solutions. I’ve written before about the need for organizations to listen widely and inclusively in formulating transition plans.
2. Getting the right people around the table means unlikely alliances. The sidelines of COP27 have brought competitors and policymakers together in unlikely collaborations and alliances that we could never have imagined before. It’s critical because climate action touches science, business, consumer behavior, finance and policy. We need to look at the issues in multiple dimensions, and so it’s back to basics: have we got the right information and people around the table to make fully reasoned decisions to solve this complex challenge? For example, in Minnesota where I live, there is a plan under development to mine for nickel to support electric vehicle (EV) manufacturing needs to balance concern for natural resources, community and biodiversity impacts with employment and wider decarbonization needs. Sustainability strategies challenge established decision-making, and require that trade-offs are addressed with transparency, dialogue and wider stakeholders.
3. Whole system thinking requires business, policy and society to all play a part. While businesses’ growing role at COP attracts some critics, it is necessary. The planet is a system, and we need system-thinking, investment in skills and collaboration to drive change. Ambassador Seyni Nafo summed it up in an EY-led discussion at COP27 on scaling finance for the global south; we need to have a systems approach, mapping the links between the science, policy, practice and finance. Consider the opportunity of regenerative agriculture: you need governments, the financial services industry and NGOs working with farmers, logistics companies, food and beverage companies, retailers and consumers to drive change through the full food system. The same is true across many sectors, particularly transport, energy and finance.
4. Getting to the root cause of emissions or slowing their pace means rethinking established models. For example, a sustainable markets initiative-hosted event I attended examined how reducing emissions from the health care system meant not just looking at renewable sources of energy, but it meant a move to telehealth. Policy and organizations need to address how disease prevention could be targeted, therefore reducing potential emissions in health care associated with diagnosis and treatment. In regenerative farming, mechanisms to provide training and incentives to spread the cost across the whole food system value chain would allow farmers to make a profit during the transition process, while not overloading any one member of the value chain with the transition costs.
5. Radical transparency exists, even if you don’t want or need it: Increased data and reporting will reduce the opportunities for organizations to “greenwash” their achievements, an issue underlined by the launch of the UN report on greenwashing. Jurisdictions around the world are accelerating the development of nonfinancial reporting requirements. Harmonization will be key, given the demand for greater transparency and comparability. Organizations need to understand their data and performance against the metrics, be ready to be benchmarked against their peers and be ready to demonstrate that the actions organizations are taking are resulting in impact that will allow them to achieve their public commitments. Technology-driven innovation will be critical. Our own research tells us that 61% of businesses plan to spend more next year to address climate change with data and tech being two of the top investment areas. 

It would be easy to be overwhelmed by the scale of the challenge and to think the journey is too hard or too long to start now.

Instead, I have come away from my experience at COP27 with a much greater appreciation of the collaboration, innovation and opportunities in supporting sustainable and inclusive transformation. That is the road to COP28 and beyond we all want to travel on.