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The world’s climate experts, influencers, and changemakers descended on New York City for this year’s largest climate event. With more than 100,000 attendees and 600+ events, Climate Week took over parts of the city with almost a festival-like atmosphere – Climate-chella anyone?
This year’s climate week was significant since fewer corporations will be heading to COP – the UN Climate Meeting in Azerbaijan. With the US elections around the corner and many companies pulling back or hushing up about their commitments, there was more on the line.
In the chaos of wall-to-wall meetings and getting around the overcrowded city each year, I need to convince myself that Climate Week produces enough action to justify the investment.
Here are the five takeaways from this year:
1. Regulatory worries:
Corporations from all sectors are gearing up (many with trepidation) to start reporting climate and sustainability performance in their audited financial statements. The EU’s Corporate Sustainability Reporting Directive (CSRD) and similar laws around the world are starting to kick in, and the first tranche of companies will report next year.
Companies are gritting their teeth for a couple of years of compliance chaos before they get their processes right and technology solutions scale to meet the complex problem of sustainability reporting. Many claim that the investment in compliance diverts resources, but the aim is that transparency will drive action.
2. Realism and practicality:
Instead of hanging on to the goal of “1.5 degrees,” the new target is “substantially below 2.0 degrees” of warming. There were fewer ambitious and unsubstantiated goals this year and more focus on practical actions.
3. Voluntary Carbon Markets (VCM) took center stage:
The VCM has been on a steady decline since a $2 billion market high in 2021. So it may come as a surprise that it was featured so highly at New York Climate Week and even got its own day for the first time, “VCM Day,” on Wednesday.
Despite its criticisms, most think the VCM can turn it around, and new measures can bring renewed validity and authenticity to offsets. Mark Kenber of the VCM accrediting body, the Voluntary Carbon Market Institute, said, “One reason for VCM Day is to show the world that yes, people were right to be concerned about the quality of credits and projects…But we’re now in the next phase of the VCM.”
The Biden administration plan – supported by many of the world’s largest companies – involves coupling climate transition financing in developing nations with the VCM. The overall feeling seems to be that the VCM is here to stay and will be a vital component of global decarbonization strategies, so let’s get it right.
4. Reporting frameworks mature:
New governance was announced for the GHG Protocol – the standard to measure carbon emissions. In addition, CDP (formerly the Carbon Disclosure Project) is expanding its partnership with the Net-Zero Data Public Utility (NZDPU) by providing data for more than 10,000 companies – collectively accounting for more than 50% of global GDP – for public access. Michael Bloomberg said, “This new partnership will get us one step closer to…climate data accessible to everyone for free.”
Shocker: we have a new acronym, The Taskforce on Inequality and Social-related Financial Disclosures (TISFD). The TISFD follows in the wake of similar frameworks for climate and biodiversity – the Task Forces for Climate-Related Financial Disclosures (TCFD) and Nature-Related Financial Disclosures (TNFD). The new group will help organizations report on their social impacts.
5. Geopolitical unrest clouds the picture:
U.N. Secretary-General António Guterres spoke about the growing mistrust between nations hampering our ability to make progress, saying, “International challenges are moving faster than our ability to solve them.”
In an interview with Axios, Al Gore criticized the UN’s reliance on unanimity, which hampers progress by giving oil-rich nations a veto. He added that hosting three COPs in a row in petro-states is “really ridiculous.”
Agreeing with Gore, Barbados Prime Minister Mia Mottley called for a “reset” of global institutions. Susana Muhamad – Columbia’s environment minister – added that the issues are deeper than the COP process, saying, “The problem is the vested…economic interests which actually become explicit at the COP process,”