As 2018 comes to a close it is an important time to reflect on what has been a momentous year for the climate agenda.
The past four years have been the hottest on record.
To hold off the worst impacts of climate change, the Intergovernmental Panel on Climate Change’s landmark report on 1.5C, released in October, warns climate action must increase fivefold. Emissions need to halve by 2030, but after being flat for three years, they have recently been on the rise.
Meanwhile, the UN Synthesis Report on Sustainable Development Goal 6 showed the world is not on track to reach the goal on water and sanitation, with billions of people still lacking access to safe water and sanitation, water pollution still on the rise, and delivery systems weak and fragmented. Nor is the world on track to meet the New York Declaration on Forests goal to halve natural forests loss by 2020.
Whilst some of this news causes deep concern, it also provides a clear and loud call for increased ambition and action, and more than ever this year, across the world, we have seen those calls heard loud and clear.
As 2018 comes to a close and we look forward to a new year, there are many reasons for us to be hopeful.
Political hurdles to action
The way forward is clear: to change trajectory sufficiently we need nothing short of a transformation of the global economy.
Two years until world governments are due back at the table to raise their Paris Agreement ambitions, political instability and the rise of populism risk a decline of international cooperation, just at the time when it should be growing.
In the US, the White House attempts to willfully ignore climate change, despite mounting evidence to the contrary, while in Brazil, the election of President Bolsonaro could threaten the future of the Amazon, one of the world’s biggest carbon sinks.
This opposition, however, was not enough to derail governments commitment to the Paris Agreement which saw an injection of momentum this week as negotiators at COP24 in Poland secured an agreement on the ‘Katowice Climate Package’, the robust set of guidelines that will make the climate agreement operational in 2020.
And while some continue to ignore the writing on the wall, this has not been enough to stop the transition to the low-carbon future which is well underway and inevitable.
In fact, despite these hurdles, the transition to a low-carbon economy is being quickly cemented as another new reality; driven by a great deal of non-state action.
As Gillian Tett wrote in the Financial Times earlier this month:
“Sparking a revolution is no longer “just” about placards or street protests… we are entering an era when balance sheets matter more than protest barricades – and a new breed of activist warrior accountants could be the biggest revolutionaries of all.”
Faced with clear scientific evidence, and ever more information about the risks and opportunities for their investments, their businesses and their cities, these actors understand that the challenge we face pails in comparison to the enormous economic opportunities and other co-benefits that await those who can provide solutions.
Non-state action and the rise of disclosure
18 years ago, CDP set out to transform capital markets. We aimed to make environmental reporting the business norm.
In 2018, over 7,000 companies, representing over 50% of global market capitalization, and over 750 cities, states and region disclosed their environmental data through our online platform.
That’s an 11% jump on 2017.
Environmental disclosure has hit the mainstream, and with the Financial Stability Board’s Task Force on Climate-related Financial Disclosures (TCFD) garnering even more support – with the recommendations now endorsed by 513 firms – this is only set to increase.
Through our upgraded environmental disclosure platform, which incorporates the TCFD’s recommendations, the 7,000 companies disclosing this year have aligned their disclosures with those recommendations, with early analysis showing that 72% of listed companies were able to answer 21 or more of the 25 new TCFD questions in the CDP platform.
By focusing on sector-based disclosure and forward-looking metrics CDP is providing companies and investors with meaningful and comparable data to drive greater progress.
With greater transparency comes greater action
And as we have long believed, where there is greater transparency, greater action follows.
Three years on from the signing of the Paris Agreement and one year after President Trump announced his intention to pull the US out, California hosted the Global Climate Action Summit (GCAS) this September, aimed at building momentum ahead of the 2020 global stocktake.
With thousands of leaders from across society showcasing action, the summit was an important reminder of all the progress we are seeing in the real economy.
Perhaps most encouragingly, the first nine months of 2018 saw a nearly 40% surge of the number of companies committing to set emissions reductions targets in line with the Paris Agreement, with some 500 companies now committed to the Science Based Targets initiative.
Over 150 of these companies, from 26 countries, have already converted their commitment into ambitious targets, including companies in the chemical and steel sectors.
Through the RE100 initiative, we have also seen another 37 companies commit to 100% renewable electricity, making a total of 158, with 10 of the new companies based in Japan, an emerging climate action hotspot.
Meanwhile, the newly launched the Investor Agenda, led by CDP and six other groups, is enabling over 400 investors with $32 trillion in assets under management to report actions they are taking on low-carbon investment, corporate engagement, transparency and policy advocacy.
Climate action is not only a growing boardroom issue. Since the Paris Agreement was signed in 2015, we’ve seen a 90% increase in the number of cities setting targets to reduce emissions, while leading states and regions are committed to more ambitious decarbonization than their national counterparts.
No business operates in a vacuum, so climate action by the cities in which they operate helps to reinforce the work of corporates and attract investment and jobs to the area.
2019 and beyond: An unstoppable transformation
Progress is happening. As we move into the final year before nations are expected to update their national climate plans for the Paris Agreement, I expect to see all parts of society push forward with greater ambition and innovation.
But as we have seen this year, the future is not certain, and there is no time to waste.
2019 needs to be the year we urgently scale up action to accelerate the low carbon transition, halt the destruction of our forests - which could in itself provide a third of climate mitigation efforts – and protect our vital water supplies, which are central to key industries, such as agriculture, and vital to the low carbon transition.
Companies, cities, states and regions have a vital role to play in this. They must ramp up action, transparently report on their efforts and send a clear signal to governments that they are embracing the transition and need to see greater policy ambition to match.
A sustainable, prosperous future is within our reach.
Now is the time to take action to seize it.