The Risilience-hosted webinar: ‘COP28: navigating the regulatory landscape as a business in 2024’ brought together an expert panel comprising Nigel Brook, Partner at global law firm Clyde & Co; Felicia Jackson, Editor at Sustainable Growth Voice; and Sarah Webster, Sustainable Business Director at Britvic to combine their specialist analysis of this complex and evolving topic. Cutting through the noise of COP28 to provide significant insights into what the summit means for business, the webinar is now available to watch on demand.
The webinar was led by Risilience Climate Policy Lead, Andy Garraway, who was part of the Presidency team at Glasgow’s COP26. He opened the webinar with a summary of the challenges of COP28: “It was the first moment to officially acknowledge the gap between ambition and reality via the Global Stocktake. It was the first moment to recognise the role fossil fuels play in causing climate change. And it marked the moment for countries to pay up and compensate those hit hardest by the changing climate. All of this took place with a president whose day job is running the Abu Dhabi National Oil Company and against a backdrop of 2023 being the hottest year on record.”
Discussion identified the key COP28 takeaways for business. Felicia Jackson acclaimed the inclusion of ‘transitioning away from fossil fuels’ in the final text: “We’ve never had such language in legal documentation. There is now a framework that says every single member of the United Nations Framework Convention on Climate Change has agreed that the future involves transitioning away from fossil fuels. That is a conversation that cannot be changed, and it fundamentally impacts how investment is going to shift and how business decisions have to be made. I think the conversation about food and agriculture, adaptation and the inclusion of language on nature is also incredibly important. There has been a fundamental shift at COP28 that is going to change the regulatory environment overall.”
The food industry, nature and systems thinking being front and centre of discussions struck Sarah Webster: “The focus on nature has increased exponentially over the last few years and a systems-thinking approach is so desperately needed. This is something that we can take forward within business. It is incredibly complex by its nature but I think that COP beginning to think in systems is incredibly helpful for business.”
Nigel Brooks highlighted the ways that the growing regulatory focus on nature will impact business: “Nature really has grown exponentially, but I think it’s going to carry on growing because nature is in a fundamental crisis, which is going to have a major impact on a range of industries, not just food and agriculture.”
He also spoke to the importance of systems thinking to address complexity as an interrelated whole. “This is a systems issue. You can’t just look at emissions in isolation because the whole piece has to be looked at together and this will play through to the regulatory side. Nature is already embedded in European reporting requirements and I suspect that is going to become a driver for other regulators around the world.”
Attention turned to the topic of the Corporate Sustainability Reporting Directive (CSRD) as a game changer for large global businesses, both in the European Union and beyond. Sarah Webster acknowledged that addressing increasing regulation can feel overwhelming for a business but taking a positive approach has worked well for Britvic. She described CSRD as building upon the requirements of the Task Force on Climate-related Financial Disclosures (TCFD) and how Britvic had approached the reporting requirement as an opportunity to create a resilient business for the future by embedding the sustainability strategy across the business.
“CSRD adds new layers as we start looking at nature and water in the broader sense and pollution and double materiality. For businesses that are really thinking to the longer term, this process can only make them stronger. I think that it’s the right mindset to approach reporting with rather than just ticking the box. And CSRD is going to be the first big test of that.”
Nigel Brook forewarned that increasing numbers of companies will be swept-up by CSRD, including supply chains: “Companies will then be leaning hard on their supply chain to provide data. A lot of corporations can have a massive multiplier effect.”
Adding that CSRD will also affect the issue of greenwashing, Felicia Jackson said: “I think greenwashing is going to become the big concern. We thought it was an issue for the last few years but it’s really going to be dominating conversations in the next couple of years.”
Nigel Brook agreed: “This is already big in terms of disputes and interventions but I think that’s become supercharged. There are about 2,500 climate cases to date. From the mid 1980s onwards, over two-thirds have been since the Paris Agreement in 2015. About 30 per cent of those cases are against corporates but that proportion is growing and, within that rapidly evolving sub-sector, there’s all kinds of new species of litigation. The fastest growing sub-sector is greenwashing litigation, which of course extends beyond pure climate to the broader sustainability piece.”
The hour-long discussion and Q&A session also touched upon the role of carbon markets, biodiversity credits, the shape of future regulation and the need for collaboration across business to achieve the level of change needed.
Nigel Brook called for companies to “lean in and become part of the solution.” He said: “Take double materiality. It isn’t just about hunkering down and protecting your own balance sheet. It’s about becoming part of the solution and encouraging your supply chain to do that as well. The purpose of all of these regulations is to change behaviour. It’s not simply to report on what you’re doing but to directly, and through peer pressure and stakeholder pressure, force you in the right direction. The companies that do that, rather than simply report, will be the ones who see the high ground in terms of economic performance, sustainable business performance, reputation and stability.
“Behavioural change needs to be at all levels of the company. It’s no good having great aspirations at the board level and in the sustainability team if the people making the day-to-day decisions carry on the same old way.”
He also raised the probability of regulation becoming more challenging. “If you think the regulations you’re seeing today are tough, just you wait. You’ve got to be forward looking. These regulations can be tough to comply with and they’re going to require aspects you’ve never really had to look up for, qualitatively or quantitatively. It will become harder and harder to hide.”
Securing leadership support for the sustainability strategy is key to making progress in an organisation. Sarah Webster flagged the importance of identifying opportunities: “Where can you influence? Where can you really drive and create the opportunities for business? This isn’t all doom and gloom. We have got to see the opportunity and how we find that sweet spot between having a successful business and also doing the right thing. It is possible if you are looking over the right time horizons.”
Felicia Jackson also pressed the need for business to support positive change: “I do think there are remarkable opportunities to lead the world in a different way and companies need to support the process and look to the future. Business must understand the science and understand the opportunity, and support positive change.”
- Watch the webinar ‘COP28: navigating the regulatory landscape as a business in 2024’ webinar on demand