Many say COP26 was our last chance to tackle the climate emergency. The window to achieve our net-zero emissions target is closing very fast and we need ambitious actions to reduce our greenhouse gas emissions by 40-45% before 2030. One of the key goals of COP26 was mobilizing finance, an essential tool to achieve our climate goals. Mobilizing private and public capital is crucial for the development of climate-resilient infrastructure, funding innovative technologies, and shifting to climate investments. As the United Nations Conference of the Parties said, ‘every company, every financial firm, every bank, insurer, and investor needs to change.’

Our Director, Juvarya Veltkamp, was in Glasgow last week as an Observer of UBC’s Delegation to watch for critical outcomes related to sustainable finance and climate governance. Throughout her time in Glasgow, she shared what happened during the negotiations, with special attention to Canada’s efforts, through blog posts. A week after her return, she shared some insights with us so Canadian firms better understand how COP26 will affect their businesses and operations. 

Q: First of all, welcome back to Canada Juvarya. Many things happened during the first week of COP26. You attended several main events and speeches as well as side events on climate law, cities, and climate finance. What was the biggest outcome of COP26 in your opinion? What is the main takeaway you took from the negotiations?

J: The Glasgow Climate Pact as it is now called, failed in its objective to limit global overheating of the planet to 1.5°C degrees. However, the UK Presidency of the COP had aimed to ‘keep 1.5 alive’, and may have done so – the Parties will meet again in one year with the aim of increasing ambition and mitigating climate catastrophe.

We cannot understate how high the stakes currently are – we know that the decisions we make in the next 12 months will determine what sort of planet and what sort of climate we have, we are past the point of return.

The presence of both corporations and investors and the strong signals they sent in support of stronger climate action was a positive outcome. Even though I wrote about taking Mark Carney’s GFANZ with a grain of salt (as well as its associated $130T in ‘service of’ a net-zero transition), the voices and commitments of the private sector and institutional investors show that if world leaders had the gumption, there will be political support.

In the end, however, the talks didn’t achieve their goals because Parties did not manage to limit proliferation of fossil fuels for two main reasons: the inability of leaders to commit to a renewable, clean energy vision at home, and therefore at COP, and the inability of the developed world to appropriately finance the transition and adaptation of developing countries.

I come away with a feeling of dread for developing countries already disproportionately footing the bill for the impacts of climate change, a feeling of frustration at world leaders who failed to show real leadership at this critical time, and a feeling of urgency of the work we have to do, for those of us working with what the COP calls ‘non-state actors’ (cities, regions, corporations, and investors).

Q: The third day of COP26 focused on mobilizing finance, one of the main goals of COP26. As you mentioned in one of your blog posts, mobilizing private capital is key to enabling the goal of global net-zero emissions and ensuring that every financial decision takes climate into account. We need a huge amount of capital to ensure our buildings and infrastructures are climate-resilient, to transition to renewable energies, and to ensure banks, insurers, investors, and financial firms’ investments are aligned with net-zero. Would you say COP26 was a success in terms of aligning private finance with climate goals?

J: I think GFANZ and the Race to Zero were herculean efforts that have created immense momentum towards net-zero ambitions in the private sector, but there is still a lot of work to ensure that these efforts do not just amount to greenwashing.

In my experience from the green buildings sector, the design and construction community started to adopt a target for emissions reduction with the advent of the Architecture 2030 goal, in the early 2000s. Leading real estate and built environment actors set a goal for all new buildings and major renovations to be ‘carbon neutral’ by 2030 – this aspiration is what ultimately shaped what we now know as the ‘green building community’.

The efforts were buoyed by the advent of industry-led green buildings ratings such as the USGBC’s LEED, and local governments around the world – including the City of Vancouver – started to align policy with the 2030 targets, and even LEED. Eventually, the City of Vancouver brought forward the carbon-neutral building’s target to 2020, and developed the Zero Emissions Building Code, and have been able to reduce emissions from new buildings by 70%.

There were many things that we had to work out along the way. Energy targets vs. emissions targets. What about construction waste? What about embodied energy?

It is obvious that industry matured significantly during the past 20 or so years, and today green buildings and deep retrofits are held up as the poster child for how to address the climate crisis. But now, with GFANZ and the Race to Zero, we don’t have 20 years to work this all out as we did for green buildings. We will need to clarify what net-zero means and how to create credible pathways forward for sustainable finance – all within the space of a year because that’s how long we have left if we are to avoid decisions that will lock us into dangerous levels of global overheating. 

Q: Which outcome from COP26 do you think will have the biggest impact on Canadian firms? What do Canadian firms need to work on?

J: One thing was crystal clear at COP26: the oil and gas sector has lost its social license to operate. In Canada, we need to move past a demonizing of the oil and gas sector, and see it as one part of our community that needs compassionate and urgent support with transition. Rather than the old arguments that we still need gas as a ‘transition fuel’, or that our oil and gas is somehow more ‘ethical’ than that of Saudi Arabia, or Russia, we need a vision of a renewable energy future that shows opportunity for all Canadians. And an opportunity where we benefit without subjecting billions of people in other parts of the world to climate catastrophe.

This means getting real about the choices we face and getting down to brass tacks in terms of the data we focus on. For all firms in all sectors, we need to understand our carbon footprint and ensure we include Scope 3 emissions – which can be up to 90% of the emissions for many organizations. But beyond that, we need every organization to inspect its business model and ask the question ‘is what we are doing in service of the best interest of people and the planet? And if not, how do we urgently re-evaluate our purpose, and realign our strategy so that we can be leaders in creating a climate where our children, where future generations, can still thrive.