With the striking of the gavel by COP28 President Sultan al-Jaber, the global community has witnessed the conclusion of the 2023 United Nations Climate Change conference. Commonly known as COP 28, the conference took place this year in Dubai, UAE, from November 30th to December 13th. Organized by the COP 27 Egyptian Presidency and Incoming COP 28 Presidency, the conference aimed to lay the groundwork for transformative action toward a low-emission and climate-resilient world.
COP, an acronym for the Conference of the Parties, represents a gathering of 197 nations that endorsed the UN Framework Convention on Climate Change in 1992. This pivotal agreement set the stage for subsequent COP meetings, with the first held in Berlin in 1995. Notably, this inaugural conference led to the establishment of the Kyoto Protocol, placing initial emission reduction obligations on wealthier nations. However, the breakthrough moment came in 2015 with the Paris climate agreement, which marked a crucial turning point by overcoming the longstanding impasse on climate responsibility.
Fast forward to COP 28, where diplomats from nearly 200 countries, including heads of state and government, convened with a paramount objective — expediting the global transition away from fossil fuels. However, the final agreement has not escaped criticism, as many attendees argued that its wording was too lenient, harbouring a ‘litany of loopholes.’ It is evident that an urgent response and decisive action are imperative, given the pressing need to curb the perilous heating of our planet. It is ELREP’s view that businesses need to continue to take the lead on pioneering innovative solutions.
Reflecting on the Previous COP
Examining the outcomes of the preceding COP held in Sharm el Sheikh provides insights into the industry’s landscape. While the establishment of a fund for climate disasters in vulnerable countries was a notable achievement, progress in emission reduction was somewhat limited. The industry’s imperative for decarbonization gained prominence, underscored by the European Commission’s estimation that 70% of existing buildings require retrofitting to meet carbon reduction goals.
The preceding COP also shone a spotlight on greenwashing concerns, prompting scrutiny from the UN High Level Expert Group on Net-Zero Emissions Commitments of Non-State Entities. The group monitored climate commitments of banks and large businesses, releasing a report on November 8th to address false claims of progress against climate change. Accenture’s findings added weight to these concerns, revealing that while around one-third of the world’s largest firms have publicly stated net-zero goals, 93% are unlikely to achieve them without substantial additional efforts.
In the broader context, geopolitical events, such as Russia’s invasion of Ukraine, have influenced a global shift towards renewable energies. Countries are increasingly breaking their dependence on carbon-heavy fossil fuels that have traditionally dominated the energy landscape. This shift is evident in the latest Emissions Gap report from the UN Environment Programme, which highlights disappointing progress since COP26 in Glasgow.
Industry responsibilities
The logistics industry is swiftly moving towards net-zero emissions, driven by guidance introduced at the World Economic Forum’s Annual Meeting in January 2023. Collaborative efforts from Smart Freight Centre and the World Business Council for Sustainable Development provide companies with insights on understanding and tracking logistics emissions. The guidance, emphasizing the benefits of ISO 14083, is crucial for implementing effective decarbonization strategies.
Globally, the logistics and transport sector stands as a major contributor, accounting for over a third of carbon dioxide (CO2) emissions. In 2021, this sector alone contributed 7.7 gigatonnes (Gt) of CO2, highlighting an 8% increase since pandemic measures were lifted. This demonstrates that the logistics sector plays a pivotal role in transitioning to a decarbonized future. Meeting net-zero targets requires a 20% reduction in emissions by 2030, anticipating the projected growth in global trade demand.
The real estate sector alone is responsible for nearly 40% of global CO2 emissions, with 70% of this attributed to building operations and 30% to construction activities. High-emission properties faced value reductions post-enactment of climate policies, prompting a shift towards sustainability preferences among market participants.
Decisions regarding building types and construction materials significantly impact the real estate sector’s carbon footprint. Prioritizing renovation and adaptive reuse reduces costs and demand for carbon-intensive materials. With approximately two-thirds of the global building area still present in 2040, aligning with high energy efficiency standards and aiming for net-zero emissions is crucial. Astute investors globally consider climate change implications, emphasizing property resilience to climate-related damages and preparedness for a net-zero future to strategically position themselves for future profitability. We are now witnessing key players and decision-makers in these industries actively addressing their role in steering the course to minimize the impacts of climate change, with companies now promoting and discussing how they are making a meaningful difference.
An example of this trend can be observed with Maersk, a major player in the transport and logistics industry, who contribute approximately 1% of the total of the transport and logistics annual CO₂ emissions. Committed to fostering a net-zero economy, Maersk pledged in 2018 to decarbonize shipping by 2040, a decade earlier than planned. Accelerating progress, the company ordered 6 new green vessels, expanding its fleet to 25 methanol-enabled ships, and became involved in 10 strategic fuel partnerships.
The fuel industries clearly have a crucial role to play in the transition to net-zero. Shell, one of the world’s largest traders and blenders of biofuels, is producing low-carbon fuels that help lower carbon emissions from transport. Another crucial player, BP, advocated for a price on carbon by endorsing the World Bank carbon pricing statement in 2014. These initiatives underscore the industry’s recognition of the urgency in addressing climate change and the collective responsibility to drive meaningful change.
At ELREP, we adopt a sustainability-focused approach and are leveraging ongoing innovations across various industries, as exemplified by the Levi Distribution Centre in Dorsten, Germany. The facility is designed in accordance with Cradle to Cradle principles, effectively minimizing waste production. Furthermore, the construction incorporates sustainably sourced concrete, rooftop solar panels, and an eco-friendly landscape into its design. It is imperative to continually expand our comprehension of responsibility and identify actionable steps to further enhance our commitment to sustainability.
As the world unpacks the outcomes of COP 28 in Dubai, the imperative for embracing and investing in sustainability has never been more pronounced. The global transition to a low-emission and climate-resilient future necessitates collective action across industries. Sectors, particularly logistics, real estate, and energy, should be held accountable for their contributions to carbon emissions.
The finalisation of the COP 28 agreement marks the beginning of the next phase of efforts for the global community. The success of this conference hinges on the determination of nations and industries to implement transformative changes, setting the stage for a sustainable and resilient global landscape. The responsibility lies not only in reducing carbon footprints but also in fostering a shared commitment to a greener, more sustainable future for generations to come. In 2024, Azerbaijan will take centre stage as the host of COP29, where we hope to be reflecting on a transformative year that propels us significantly closer to achieving our net-zero objectives.
Sources
https://www.bbc.com/news/science-environment-67679734
https://www.planetmark.com/cop27-outcomes-and-reflections/
https://commission.europa.eu/news/focus-energy-efficiency-buildings-2020-02-17_en
https://www.un.org/en/climatechange/high-level-expert-group
https://www.iso.org/contents/news/2023/01/a-net-zero-logistics-sector.html
https://www.forbes.com/sites/davidcarlin/2022/04/05/40-of-emissions-come-from-real-estate-heres-how-the-sector-can-decarbonize/?sh=475e907f63b7
https://www.maersk.com/sustainability/our-esg-priorities/climate-change
https://www.shell.com/energy-and-innovation/new-energies/low-carbon-fuels.html
https://www.bp.com/en/global/corporate/news-and-insights/reimagining-energy/sustainability-report-carbon-6-ways-bp-taking-action.html
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