In the race toward urgent climate action

The 27th Annual Conference of the Parties (COP27) of the United Nations Framework Convention on Climate Change (UNFCCC) took place in Sharm el-Sheikh, Egypt, in November 2022. The purpose of this COP was to focus on implementing the various goals and pledges made during the 26th COP. It was concluded that nearly 200 countries had agreed to the Sharm el-Sheikh Implementation Plan¹  at the conference.

A summary of some of the key developments at COP27 is presented in this report as well as KPMG specialists perspectives on how these developments may affect organizations including KPMG firms' clients. Although progress has been made in some key areas, there is still much to be done.

There are five actions that organizations can take as they look toward COP28:

• Consider how carbon markets (trading systems where carbon credits are bought and sold) can fit into their net-zero strategies.
• Gain an understanding of how climate hazards can affect assets, operations, supply chains and people now and in the future.
• Support and enable the green innovation ecosystem to help achieve a successful global climate strategy.
• Consider integrating people-centered just energy transition principles into decarbonization and resilience strategies, operations and across value chains.
• Gain further knowledge of nature and biodiversity loss risks and how to act on them to protect their businesses and communities.
  

To limit global temperature increases to 1.5°C, the following question must be asked: Where does the world find the resources to do so? In the 2015 Paris Agreement, there are two temperature goals: to keep the rise "well below 2°C" from pre-industrial levels and to pursue efforts to keep it at 1.5°C. Because of the growing consensus that 1.5°C should be the target, at COP26 in Glasgow, countries agreed to focus on a 1.5°C limit.

According to the COP27 implementation plan, rapid, deep and sustained emissions reductions and a substantial increase in climate finance are essential to reduce global warming to 1.5°C. Despite this, the plan does not outline the additional actions, solutions, and pathways required to reach this goal.

The concept of keeping temperature rises to 1.5°C was kept alive — but only just — and there are certainly some doubts as to whether this goal can be achieved.