Estimated reading time: 5 minutes
COP28 is just around the corner, and the industry is gearing up for sustainability to take centre stage.
At ICC United Kingdom’s annual conference, International Trade and Prosperity Week, TFG’s Deepesh Patel was joined by Chris Southworth, Secretary General at ICC United Kingdom, to discuss the importance for the business of limiting global temperature increase to 1.5° C and what the ICC is doing to support the sustainable transition.
1.5°C: The magic number
1.5°C was the key figure and theme of the conference. The 1.5°C climate benchmark, set out by the Paris Agreement in 2015, is the consensus temperature assessment beyond which global temperature increases will result in irreparable climate breakdown.
Any rise above the 1.5°C target presents a multitude of negative consequences for the planet.
Southworth said, “I think what’s more acute now is we’re not on track for 1.5-2° at all. We’re actually on track for 3°. As the temperature increases exponentially…the trouble is you get to points of no return. You get to the point where the whole economy becomes uninsurable. This is already the case in some parts of the world. In the Pacific, it’s even more acute. Whole countries will disappear as sea levels rise.”
The initial effects of this assessment are already evident in some areas affected by unprecedented droughts or flooding as a result of climate change.
Southworth said, “This will apply to all of us. Our homes and businesses will be uninsurable if inaction continues, and that presents all sorts of risks.”
It was essential to not lose sight of this trend of rising global temperatures. Southworth said, “When you hear politicians talking, they often skip the whole subject and present net zero as a cost to the public. What they’re not telling you is the cost of no action is far, far greater than the cost of action.”
With the global temperature increases, the world is venturing into uncharted territory. The 1.5°C increase would initiate negative feedback loops and trigger climate points that result in irreversible damage.
Southworth said, “The point gets lost sometimes that a 1°C increase on the equator is equal to a 5-8°C increase in the northern hemisphere. Temperature increase is not even.”
Trade and climate: Establishing sustainable global value chains
During the International Trade and Prosperity Week, the ICC United Kingdom emphasised the connection between the 1.5°C temperature rise and economic implications. In this framework, the focus concentrated on delivering sustainable GVCs as a strategic measure to counteract the rise in global temperatures. Much of the climate impact is made in the supply chain.
Linking trade and climate was critical according to Southworth, who said “We’re not talking about trade enough in this context. The current trade system is not fit for purpose to help deliver the sustainability goals we have all agreed to. To achieve this, we must transition quickly off antiquated paper-based systems and into a data-driven environment so that companies have more accurate information from which to make informed decisions.”
Fundamentally, this was due to the fact that those making the commitments were climate scientists and biodiversity experts, not trade experts. Commitments were made not realising the state of the trading system.
ICC United Kingdom was seeking to ensure greater synergy between trade and sustainability goals in this regard. Southworth said, “It’s not just about the impact on the ground where our business operations are, it’s what’s happening in supply chains and when goods or services are moving from A to B.”
This requires an in-depth understanding of the nature of global trade and financing activities across regions and value chains.
Practical toolkits for SMEs: Enhancing environmental Compliance
Much of ICC’s focus is on policy advocacy at the global level, and shaping global frameworks.
However, Southworth said “When you talk to an average person, particularly at small companies, they just want practical advice and guidance. And so the toolkit is really designed to collate what we know and what we see and give some examples, practical examples, of case studies of what success looks like.”
The toolkit provides practical tools like reporting frameworks to help businesses to enhance their understanding of these frameworks, including the Taskforce on Nature-related Financial Disclosures (TNFD) and the Task Force on Climate-Related Financial Disclosures (TCFD).
The toolkit also includes checklists tailored for SMEs. For smaller companies, having a straightforward checklist of essential actions for immediate implementation to enhance environmental compliance is often highly beneficial.
Southworth said, “So, it’s intended to be very practical. It’s intended for decision-makers to be able to share, wherever that might be in the world, or wherever that might be in the supply chain.”
The ICC and COP28
The pressure is on to see concrete progress at COP28. According to Southworth, policymakers and practitioners need to demonstrate more ambition and more action on implementation to deliver results at a faster pace.
Southworth said, “We’re not seeing enough progress being made at any of the multilateral forums right now. And that’s because there are just differences of opinion on key issues depending on where you’re coming from…And that has a real impact on the ability to negotiate real actions.”
This was evident in other fora outside the UN, such as the G7 and G20. Southworth noted that there needs to be a balance between being pragmatic and ambition, but that taking no action is not an option.
From a business community perspective at COP, Southworth said “It’s really apparent that businesses are now way out in front of governments in terms of their ambition, in terms of their prioritisation on this whole issue – the whole area of sustainability. This is a major priority in every boardroom.”
From a business standpoint, taking action on climate issues needs to be seen as an opportunity to attract investment, drive economic growth and create the green jobs of the future. For Southworth, the foremost priority in this scenario is ensuring that businesses are actively present and contributing to the discussion. We can’t do this without the private sector. If we’re not there, things don’t happen,” he said.
Secondly, the industry needs to engage with elected officials and ensure that they feel the pressure to act on sustainable targets.
Lastly, Southworth said, “And number three is to present the challenge in a positive light. This is not about cost, it’s about investing in the long-term future of the economy and our children. We need to make sure that governments are following through on their side of the partnership with industry.”