COP meetings work on a consensus-based mechanism where nothing is agreed until everything is agreed. Over the weekend in Glasgow we witnessed those with the most to lose from a changing climate set aside their ambitions in the interests of the broader package. Along with last minute changes to the agreement text on coal, this resulted in the COP President apologizing for both the process and the substance. The question many people will now rightly be asking is whether too many concessions have been made in the quest for consensus.

On the plus side, we have a Glasgow Climate Pact agreed by all 197 countries. More than 140 governments have announced net zero goals, covering 90% of global emissions, versus 30% in 2019. We have explicit reference to the ‘phasing down’ of coal and a call for ending of inefficient fossil fuel subsidies for the first time in the final agreement text, which many would not have predicted at the start of the talks, while nature, biodiversity and oceans were also notably included. There is now a commitment to double the level of finance in climate adaptation and ensuring a more equitable transition to a low-carbon economy was also a key theme. We saw meaningful commitments on stopping deforestation and limiting methane emissions, as well as (finally) agreement on the rules needed to implement the Paris Agreement. And, reflecting the urgency of the situation, countries have now been requested to come back in 2022 with updated plans, rather than waiting another 5 years.

In terms of the private sector, 5,200+ businesses and 450 financial institutions are now signed up to the UN ‘Race to Zero’ campaign, which means that they have committed to halving their emissions by 2030 and to reaching net zero by 2050. The announcement of the International Sustainability Standards board (ISSB) by the IFRS Foundation—to drive harmonization of disclosure—and the $130 trillion (40% of the world’s total financial assets) committed to net zero through the Glasgow Financial Alliance for Net Zero were especially eye-catching.

However, at the same time, the ambition to reach 1.5°C that ERM supports is variously described as being on ‘life support’ or having ‘a weak pulse’. Projections started the Summit at around 2.7°C and are now at 2.4°C (although some point out that 1.8°C is still feasible if everything promised is delivered). On the question of finance, the $100 billion a year promised to help poorer countries address climate change remains a sticking point. And looking at the key outcomes sustainability experts wanted to see from COP26, it’s clear that progress has been patchy.

Despite the obvious areas of disappointment, I remain optimistic. This has been in many ways ‘the Real Economy COP’ with countries, cities, the private sector and civil society coming together with a shared desire to act. Talking to clients and partners over the course of the meeting, it’s clear that beyond the many announcements and the detail of the agreement text itself, a number of take-aways for business emerged:

  1. The business opportunities represented in a low-carbon economy transition are significant and there are massive incentives to take action alongside managing the risks of a business in rapidly changing times.

  2. Net zero targets backed by robust transition plans are a minimum requirement that need to be in place now.

  3. The pendulum is swinging from voluntary action to mandatory regimes. Businesses that proactively take action will be better placed and can help restore trust.

  4. Putting nature and biodiversity at the heart of climate action and ensuring a socially just transition are essential components of society’s response and business needs to play its part.

  5. We will only deliver the pace and scale of change that we need through broader coalitions of change and real engagement with stakeholders—businesses collaborating with governments, customers, suppliers, employees and the wider society.

We know what we have to do. The challenge now is execution at pace and scale. At ERM we will continue to help organizations operationalize sustainability and I look forward to working with our clients and partners to deliver the change we all want to see.

The clock is still ticking.