Sharm El- Sheikh COP 27 – day 2

Tuesday 8 November 2022

At Day 2 of COP 27 we heard further opening statements from heads of State and Government and round-table discussions took place.

Some highlights from speakers include:

• Paul Kagame, President of Rwanda spoke on the global north's attitude towards Africa: "The most valuable contribution that developed countries can make is to reduce their emissions faster while investing in Africa to build sustainable, green power. Questioning whether Africa is ready to make use of climate finance should not be used as an excuse to justify inaction”.
• Ursula von der Leyen urged the global north to follow the EU's example of committing climate financing to the global south and highlighted the EU's renewable energy record.
• John Kerry, the US climate envoy, also vowed as the midterm elections took place in the US, that Joe Biden's administration will press ahead on its climate action regardless of the results.
• Shehbaz Sharif, prime minister of Pakistan, pointed out the devastating impact Pakistan suffered from the extreme flooding this year where 33 million people were impacted, and the estimated damage of loss exceeded USD 30 billion.
• Mia Mottley, the prime minister for Barbados, celebrated that "loss and damage" had been added to the agenda.

Greenwashing

Preventing greenwashing in climate finance, pledges, and net-zero plans by the private sector has become a hot issue for COP 27. Established by UN Secretary General, Antonio Guterres the United Nations High-Level Expert Group on Net Zero Emissions Commitments of Non-State Entities in its report entitled  "Integrity Matters: Net Zero Commitments by Business, Financial Institutions, Cities and Regions Report" highlight that, while in the years since the Paris Agreement many corporations, cities, states and regions have made voluntary commitments to reach net zero, in the absence of the regulation, too many of the pledges do not align with the science, do not contain enough detail to be credible, and use the terms "net zero" or "net zero aligned" (as well as many other similar terms) inconsistently. Antonio Guterres in representing the UN High Level Group on the Net Zero Emission Commitments of Non-State Entities has taken a stance of "zero tolerance for green washing"

Particularly, the use of carbon credits to offset emissions has come under fire for enabling greenwashing and fostering a phenomenon where corporations delay taking decisive actions to lower carbon (CO2) emissions. Carbon credits as a policy instrument were introduced in the Kyoto Protocol to the UNFCCC in 1992 as a means to help incentivise CO2 emissions reduction. In some jurisdictions, such as the EU and the UK, obligatory emission trading schemes have been introduced. In addition, voluntary carbon markets have also emerged. The voluntary market has enjoyed increasing popularity in particular for the offsetting of carbon emissions. Climate activists have criticised the overreliance and structural pitfalls (such as the absence of binding global standards) of voluntary market carbon credits as a way for the private sector to avoid taking meaningful actions that go to the core of reducing carbon emissions.

The UN high level expert group is calling for stronger action and effective accountability to prevent greenwashing.  The group's main recommendation at COP 27 is that a net zero public pledge should be made by the leadership of the non-state actor and represent a fair share of the need global mitigation effort. The pledge should contain interim targets (including targets for 2025, 2030, and 2035) and plans to reach net zero in lined with the Intergovernmental Panel on Climate Change (IPCC) or International Energy Agency (IEA) net zero GHG emissions modelled pathways that limit warming to 1.5 C declining by at least 50% by 2030, reaching net zero by 2050 or sooner. Additionally, the High-Level Report offers 10 practical recommendations that provide clarity on four key areas, namely, environmental integrity, credibility, accountability and the role of governments. Catherine McKenna, chair of the expert group and former Canadian climate minister, reiterated that net zero pledges must be "about cutting emissions and not cutting corners".

We therefore expect to see action to prevent greenwashing implicating higher compliance standards in corporation's business models, and more climate reporting plans, requiring companies to go further to achieve the ambitions of the Paris Agreement.

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