Galina Spasova (Senior Research Analyst)

COP26 ended on November 13, 2021, with many promises but few actionable plans in place. Several economies face stronger pressure for results, including the UK, the US, China, India, and Brazil. The final agreement barely kept 1.5C of climate heating within reach, with the hopes that the biggest polluters will present more ambitious plans next year.

Whether this is in fact the case would be difficult to assert for some countries, such as the UK, where surveys reveal that 65% of businesses lack the reporting mechanisms to support delivery against this target, while only 12% obtain third-party verification on their data.

If you missed our blog from last week, we covered a number of important announcements related to technology and sustainability.

Creating Sustainable Industries

Fuel, Transport, and Infrastructure

Prior to the COP26 final agreement, we observed several initiatives aimed at improving international cooperation around the impactful topics of carbon dioxide, methane, and above all helping developing countries through their investments related to climate change. The US-China agreement on climate cooperation surprised audiences by revealing a commitment between the two countries to hold regular meetings on the issue over the next decade.

The second week of COP26 also focused on phasing out fossil fuel vehicles by 2040. But this commitment between 24 countries was marred by the absence of some of the major carmakers (e.g., BMW, Volkswagen) and the countries with the biggest automotive industries, including the US, China, France, and Germany. While they acknowledge their determination to meet this goal, major automotive players noted “considerable uncertainty about the development of global infrastructure to support a complete shift to zero-emissions vehicles”.

The ICT industry will be impacted in similar ways as the rest of the markets, with looming changes in the way international travel is conducted, as well as changes rippling throughout logistics and the supply chain. However, technological solutions can be implemented to optimise transport fleets in terms of lowering environmental impact and improving efficiency, which means that vendors whose offerings include similar propositions will benefit from increasing demand.

Energy, Oil and Gas

The second week of COP26 was marked by the launch of the Beyond oil and gas alliance (BOGA), an international coalition of governments and stakeholders working together to facilitate the managed phase-out of oil and gas production. Announced in September 2021 and officially launched at the end of the second week of COP26, the coalition was born from an initiative of Denmark and Costa Rica and has received immediate acclaim from a number of countries and regions. The ambition is to align oil and gas production with the Paris Agreement goal, keeping emissions below 1.5° C as well as creating an international community to support governments in delivering their commitment to reduce oil and gas production.

In 2017, for example, France announced it would stop the extraction of oil and gas starting from 2040, while last summer, Greenland suspended all hydrocarbon exploration activities. Italy announced plans to reach 70% of renewable energy usage by 2030. The alliance will have a huge impact on the industry as members will need to reduce oil and gas production, not only in their countries, but in all their territories of jurisdiction, thus, including both leasing and licenses. When it comes to IT providers, they will have to pay closer attention to their ratio of energy sources used for operations and manufacturing, and ramp up investments in renewables.

Public Sector, Cities and Buildings

For the first time, the climate change summit held a day dedicated to cities, regions, and the built environment in recognition of the fact that these account for 40% of carbon emissions. A group of public and private sector organisations came together under the #BuildingToCOP26 consortium to set the agenda for the inaugural built environment day and to promote three core objectives:

  1. For all countries to include full building decarbonisation target policies and measures in their Nationally Determined Contributions (NDCs) (To date, 136 countries have included buildings in their NDCs).
  2. To have 1,000 cities and at least 20% of the largest built environment businesses by revenue committed to the UN’s Race to Zero.
  3. To unite the sector’s stakeholders behind a shared goal: that by 2030, 100% of new buildings must be net-zero in operation and embodied carbon must be reduced by at least 40%; and, by 2050 all new and existing assets must be net zero across the whole life cycle.

There was strong representation from many large and small players from the real estate industry, including architecture, engineering, and construction (AEC firms), technology companies, asset managers, research organisations, and public sector entities, albeit with a few notable absences. One of the key announcements included 44 additional businesses representing $85 billion annual turnover signing up to the market-leading whole-life carbon requirements of the World Green Building Council’s Net Zero Carbon Commitment.

This is an emerging opportunity for smart building solutions providers, and several companies already promoted their new products, including Johnson Control’s OpenBlue Net Zero Buildings as a Service. The direction of travel in the industry is clear and is backed up by a significant amount of public sector investment, including through COVID-19 recovery funds such as the NextGenEU recovery plan and the US Infrastructure Bill.

Chemicals, Construction and Manufacturing

Science and innovation become critical factors in the race to 1.5C, as 23 governments banded together under the name Mission Innovation. Countries have pledged to work closely for faster development of clean tech, CO2 removal, production of renewable energy sources, chemicals and materials. Heavy industries, such as steel, cement, and chemicals, which require enormous amounts of energy and extremely high temperatures, are at the core of these projects. Sectors targeted by Mission Innovation account for over 50% of the world’s emissions.

While this move may come as a disruption to heavy industries, this shift has the potential to greatly benefit the global agenda of reducing CO2 emissions. Organisations can ensure a smoother transition to these new operational models by incorporating the sustainability agenda at the core of their business processes.

Social Justice

A 3.5m puppet, called Little Amal, travelled on foot for 8,000km (part of the project The Walk) from Turkey to the UK, and joined COP26 to raise awareness on the disproportionate impact of climate change on young women and girls. The puppet, whose original purpose was to “rewrite the narrative about refugees”, has now become a symbol for “stronger and more meaningful participation of women and girls in climate action”.

On this note, the UK pledged £165m to fund progress towards achieving gender equality and climate action in developing nations. This comprises of up to £45m to help local communities and women’s groups in Asia and the Pacific to address gender inequalities and climate adaptation, and £120m to boost resilience, biodiversity, gender equality, and other green projects in Bangladesh.

IT vendors have a dual role in the issue of social justice — on the one hand as employers that need to ensure the provision of equal opportunities to women, but also by instituting STEM programmes (Science, Technology, Engineering, and Mathematics) education targeted at young women and girls, to reduce the skills gap in ICT.

Achieving Sustainability Through Cooperation

The mixed reaction with which the COP26 final agreement was received was not unexpected. Collective action is only successful when the parties involved have sufficient opportunity to influence change. Greater cooperation is needed between all sectors and governments towards the common goal of mitigating climate risks.

As public awareness on these issues becomes stronger, consumer sentiment is also shifting towards choosing a lifestyle and products that are less harmful to the planet from providers that actively demonstrate their commitment to sustainability. For businesses, backpedalling on collective actions due to fear of loss of competitive advantage in the short term will result in greater losses in the long term due to eroding customer trust. Meanwhile, trailblazers that commit to reaching 1.5C early on will reap the benefits of being at the forefront of change.

The underlying common variable between all these upcoming changes is that measuring progress is essential to achieving climate-related goals. This can only be implemented through streamlined data collection processes, with thorough data management, analysis, and reporting tools. This brings technology yet again into the spotlight, with automated IT processes being capable to meet increasing requirements of processing large volumes of data. In addition, further implementation of processes that replicate these efficiencies will be necessary.

Find out more about how the agreements achieved during COP26 will affect the IT industry in our free webcast on November 30, 2021, at 14:00 GMT

Meet the team:

Galina SpasovaLouisa BarkerRemi LetempleFilippo VanaraMarcelo LecocqPhil SargeantMarta Muñoz

Sharing