Why Should the Private Sector Pay Attention to COP28?

The private sector holds a unique opportunity to channel vital funds towards climate change.

As the global community gears up for COP28, the private sector finds itself at the forefront of the battle against climate change. With the threat of missing the 1.5°C climate target outlined in the Paris Agreement, the urgency for businesses to adopt climate-friendly practices has never been greater. We explore why the private sector should pay close attention to COP28 and how they can actively participate in global decarbonization efforts.

The transformation to climate-friendly business practices is both necessary and transformative. Every industry sector will be impacted, and companies that proactively adapt will discover new business opportunities, while those who lag behind may face risks. At ClimateTrade, our customers span a diverse set of industries, and we have witnessed first hand a growing readiness among companies to scale up climate action, aligning with the requirements to meet global climate targets. The problem is, despite their best intentions, they don’t always know where to start, and the complexities around the carbon market can be off putting. 

Climate Challenges Faced by the Private Sector

Despite the growing awareness, private sector climate action remains timid. One significant hurdle is the price of emissions and the uncertainty surrounding carbon credits as an efficient form of climate action. Some critics argue against carbon credits, labeling them as ‘greenwashing,’ and insist that companies should strive for full decarbonization rather than relying on compensatory measures. However, the reality is that achieving zero emissions at an affordable cost is currently beyond the reach of many companies and in some industries, impossible to achieve. 

The Role of Carbon Credits in Global Decarbonization

Contrary to accusations of greenwashing, utilizing carbon credits can be a legitimate strategy for companies committed to science-based targets and roadmaps for decarbonization. The Voluntary Carbon Market provides an efficient, cost-effective, and transparent way for companies to offset residual emissions and contribute to global decarbonization. Carbon compensation, when aligned with rigorous standards, such as the Net-Zero Standard set out by SBTi, accelerates climate action while companies await the development of further climate-friendly technologies.

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• Source: https://climatetrade.com/why-should-the-private-sector-pay-attention-to-cop28/