A look at positive tipping points ahead of COP26.
In the past year, the world has reached several “positive tipping points” in the shift to building more sustainable systems. These constructive trends reflect progress relating to net-zero commitments, biodiversity, a rise in EVs, cross-sector collaboration, green energy, social justice, and equality. The coming decades will be pivotal as we strive to restore our balance with nature, tackle the climate emergency, and get ahead of the pollution crisis. Yet, 2021 has been a year of notable impact, with the appearance of positive tipping points that are bringing real change to the climate crisis.
In the run-up to the 26th United Nations Climate Change Conference (COP26) in Glasgow, Scotland, there is increased focus on how businesses and governments are effectively kickstarting innovation and targeting investments while underpinning system-wide transformation. Together, these factors have prompted the appearance of positive tipping points.
According to the Current Opinion in Environmental Sustainability Journal, “positive tipping points” occur when the original conditions of reference are substantially and irreversibly transformed in a way that matches or exceeds a particular desired vision for the world.
In simpler terms, positive tipping points are activities that set off a cascade of changes that snowball into a movement with enough critical mass to slow global warming and help reduce natural disasters. Positive tipping points are particularly essential from a psychological perspective, allowing us to unlock the mental stalemate that often makes us feel there’s nothing we can do about climate change.
In anticipation of COP26, many businesses are making corporate announcements on ESG policy (Environmental, Social and Corporate Governance). The question is, will their promises translate into action, or, as Greta Thunberg suggests, is there an element of “blah, blah, blah”?
At Presidio, we know there is a lot of work left to do. However, we believe there is enormous benefit in recognizing positive change and momentum; in the past twelve months, we have witnessed several positive tipping points in the shift towards more sustainable systems and practices.
These developments are past urgent, and with COP26 just weeks away, they offer necessary reference points for our next steps. Conversations to watch out for at COP26 surrounding positive tipping points include a dramatic improvement in net-zero commitments, biodiversity, green energy, a rise in EVs, improving social justice, cross-sector collaboration, and how to keep temperatures below a 1.5-degree temperature rise.
Progress to Net-Zero
Love it or loath it, the concept of net-zero is here to stay. Global momentum behind the fight against climate change has never been stronger. Governments, energy companies, and businesses worldwide make ambitious pledges to reduce carbon emissions to net-zero by 2050 or before.
Under the administration of President Joe Biden, the United States has taken a leading role in the race to net-zero by putting an ambitious program in place to facilitate the country’s energy transition away from hydrocarbons to renewables.
On his first day in office, President Biden signed the US back into the Paris Agreement, which was initially signed in 2016. The Biden administration subsequently outlined targets to place the US on track to achieve net-zero carbon emissions by 2050: achieving a 50-52% reduction in net greenhouse gas emissions from 2005 levels by 2030 and delivering a carbon-free power sector by 2035.
The positive tipping point surrounding net-zero is pronounced in private markets, clearly driven by investor demand. They have already led to net-zero becoming a de facto standard for company sustainability strategies, with 68% of the global GDP now being covered by net-zero commitments.
Biodiversity Recognized as Critical in the Fight Against Climate Change
Rich, resilient ecosystems are critical for human existence, economic prosperity, and good quality of life for local and global communities.
In recent years, biodiversity loss has been largely eclipsed by a more generalized focus on global warming on the international agenda. However, the release of the IPCC report earlier in the year has finally reinvigorated the dialogue on this critical issue.
The Intergovernmental Panel on Climate Change (IPCC) and the Intergovernmental Science-Policy Platform on Biodiversity and Ecosystem Services (IPBES) joined forces to report on and highlight the importance of addressing nature loss as a vital part of the fight against climate change. The twin crises of nature loss and climate change are inextricably linked and fundamentally driven by human economic activities. Yet, the two issues have often been discussed and dealt with in siloes. The report marked the first time that intergovernmental bodies on climate change and biodiversity have worked together.
The findings were resolute: we can either tackle both problems together or not at all. As such, follow-up discussions at the intersection of biodiversity and climate change will be a critical metric to gauge the success of COP26.
Addressing nature loss offers additional benefits for business, as reflected by improved rates of economic prosperity and an increase in local employment where biodiversity initiatives take place. There has been a rise in business activity in this area: levels of investment into natural solutions have tripled since 2016.
While nature loss has risen up the agenda, there continues to be a lot of room for improvement. Only 3% of global climate finance is invested in nature-based solutions and only 1% in adaptation tactics. However, the UN states it is “working to mainstream and mobilize finance from nature from public and private sources.”
Scaling Up Green Energy
At a global level, power production from low-carbon sources (renewables + nuclear) recently overtook coal for the first time. Many are hoping that COP26 will drive governments across the globe to go further and faster than ever before in supporting a transition to clean energy.
Across the US energy markets, the falling cost of renewables paired with the retirement of older, carbon-heavy conventional generation has created huge opportunities for the rapid development of green power-generation assets. Simultaneously, organizations and individuals alike are increasingly seeking low-carbon energy solutions, lending more momentum to the green energy movement.
In its Annual Energy Outlook 2021, the US Energy Information Administration (EIA) predicted that the share of renewables in the US electricity generation mix will increase from 21% to 42% by 2050. Wind and solar generation will be responsible for most of that growth.
EV is On the Rise
Some of the most exciting aspects of the green transition in the coming decade include innovative technologies, electrification, and a new era of customer-centric products.
2020 was a significant year for electric vehicles (EVs). According to the Global EV outlook 2021, global electric car stocks reached 10 million units, up 41% since 2019. Europe witnessed the highest share with 1.4 million electric cars registered, followed by China (1.2 million) and the US (295,000).
While the US is trailing somewhat behind other countries, President Biden set a goal this August to improve electric vehicle (EV) sales 50% by 2030. In his words, “the rest of the world is moving ahead…we’ve just got to step up.” This new goal falls in line with the major vehicle manufacturers’ targets and would mean that the number of EVs on US roads could reach 18.7 million by 2030.
Social Justice and Equality
The events of recent years have dramatically accelerated conversations around diversity, pay inequality, labor standards, and social justice. Social issues have finally broken through to the boardroom, with a renewed focus on the social “S” of Environmental Social Governance (ESG). According to a survey conducted by consultancy Porter Novelli, 71% of executives said they had “never felt more pressure to engage with issues of social justice.”
IT ONLY TOOK A PANDEMIC TO HIGHLIGHT
THE S IN ESG
Covid-19 has catalyzed a broader, more profound reckoning with systemic inequities, even around pre-pandemic inequalities and injustices. Specifically, it has highlighted the dramatic and irreversible costs of an unequal society where socioeconomic divisions within populations are violent and persistent. Organizations and individuals alike are answering the call: working to find more intersectional and actionable solutions to a system that has never been equitable or sustainable.
In particular, the last year highlighted the need for businesses and corporate leaders to speak up and take action: there has been a surge in demand for experts in workplace diversity, which became one of the fastest-growing roles recruited for, according to a LinkedIn report.
COP26 will be an opportunity to raise the voices of those communities and ecosystems most affected by the climate emergency, reaffirming that future climate conferences and projects must be intersectional to ensure we develop truly intentional, equitable solutions.
Lastly, a core trend in sustainable business and a key topic at COP26 will be the strategic removal of corporate boundaries. In recent years, the improvement in cross-sector collaborations indicates a movement beyond superficial problem-solving to address our underlying systemic issues. Big businesses, in particular, are looking to tackle the complex challenge of bringing down Scope 3 emissions across their supply chains, as this category often proves the trickiest area for businesses to make reductions.
Household brands like Nike, Microsoft, and Unilever—all members of the Transform to Net Zero initiative—have outlined actions to engage suppliers in reducing upstream emissions to meet the Paris Agreement goals.
Conversations have changed dramatically in the past 12 months, from how much ESG costs to how much it will cost not to act. There’s ample evidence that we’re heading in the right direction, but a colossal acceleration is still required. However, these positive tipping points give cause for optimism. The run-up to COP26 is just the beginning—we’re entering a decade of dramatic action on climate, ecological stability, and social justice.
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