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What did the conference achieve?

While the Egyptian Presidency had promised an “implementation COP” to make concrete the pledges made at COP26, the resulting agreement contains more on the impact of climate change than on its causes.

The final COP27 deal – named the Sharm el-Sheikh Implementation Plan – achieved a historic agreement on finance for loss and damage – seeing richer nations and the most significant polluters pledge to provide financial aid to poorer nations who are most vulnerable to the impacts of climate change. Almost 200 countries agreed to the fund, yet there is currently no agreement on how much money should be paid in, and by whom, and on what basis. Earlier in the week, negotiating parties agreed to mobilise the Santiago Network on Loss and Damage, to provide technical assistance to countries experiencing extreme weather and climate disasters.

On curbing emissions, the COP27 agreement went back on key commitments established at Glasgow last year, including the target for global emissions to peak by 2025 – considered key to achieving the limit of 1.5C of heating. The deal merely reiterated the COP26 commitment to “phase down” coal, despite calls from nations including the UK to include stronger language on the phasing out of all fossil fuels, including oil and gas. António Guterres, secretary general of the UN, warned: “Our planet is still in the emergency room. We need to drastically reduce emissions now – and this is an issue this COP did not address.”

Despite these notable omissions, the agreement marked several firsts, including the first ever mention in a COP cover text of food, rivers, nature-based solutions, climate change tipping points and the right to a healthy environment. And for the first time, the agreement called for the “transformation of the financial system and its structures” to address the “global climate emergency”.

Key announcements from the UK

The UK Government announced a package of new climate finance measures, including £65.5m for clean energy innovation and £90m for the conservation of tropical rainforest in the Congo Basin. The Government also claims that it is tripling funding for climate adaptation, from £500m in 2019 to £1.5bn in 2025.

UK Export Finance announced it would be the world’s first export credit agency to pause debt repayments for low-income and developing countries hit by climate disasters. The “climate resilient debt clause” will stop debt payments for two years following such an event.

The Environment Secretary Thérèse Coffey announced £30m of seed finance to enhance nature protection and conservation through the Big Nature Impact Fund – a new public-private fund designed to unlock private investment into projects such as tree planting or peatland restoration.

Key points for business

The private sector had a significant presence at COP27, with major corporations taking to the global stage to call on their peers to take stronger action on climate change. There were also some notable announcements that could impact corporate target-setting and reporting.

The White House announced new regulations mandating that major federal suppliers will have to disclose their environmental impacts through the Carbon Disclosure Project. Suppliers will also have to set science-based greenhouse gas reduction targets in line with the net zero pathway endorsed by the Science Based Targets initiative. The Federal Government is the world’s largest purchaser, making this a game-changing move for corporate sustainability, and a significant boost to the adoption of Science Based Targets. 

And the UN launched a new report which makes recommendations on how businesses and investors can set stronger net-zero targets. These include deep cuts in greenhouse gas emissions before 2030, and minimal use of carbon offsets (again, in line with the approach endorsed by the Science-Based Targets initiative). The report was authored by the High-Level Expert Group on Net Zero Emissions Commitments of Non-State Entities, the UN-led group established to scrutinise net-zero targets and crack down on greenwashing. The report calls for “red lines” to stop new fossil fuel exploration and overuse of carbon offsets.