The escalating climate crisis, characterised by record-breaking temperatures in the Northern Hemisphere, demands urgent action^[1]. The summer of 2024 surpassed the previous record, setting a new benchmark for extreme heat^[2]. With scientists warning of global warming exceeding the critical 1.5°C threshold, the theme of Climate Week, "It's Time," could not be more aptly chosen^[3]. Despite increased investment in clean energy and net-zero technologies^[4], global temperatures continue to rise at an alarming rate.

Main take-aways

Climate Week brought together influential leaders to discuss the pressing challenges and opportunities of the climate crisis. It focused on ten key topics including energy transition, environmental justice, sustainable finance, food systems, health, heavy industry, nature conservation, policy development, sustainable living, and transport. While Climate Week featured a vast array of topics, this year certain themes emerged as particularly relevant.

Deepening decarbonisation

Discussions at Climate Week evolved around the urgency of climate action as well as implementation challenges and the impact of new EU regulations on global companies’ decarbonisation paths and sustainability reporting. The discussion highlighted the need for companies to develop comprehensive transition plans integrated into their overall business strategies and convince stakeholders of the value and resilience that decarbonisation will bring to the business. The discussions also point to the potential for the UK Transition Plan Taskforce (TPT) guidance to become mandatory and the growing trend of companies adopting transition plans according to CDP^[5].

What this means for business

If you have not aligned your plan with one of the disclosure frameworks (IFRS 2, ESRS, or the TPT guidance), it is better to adopt it proactively and stay ahead of the curve.

Phasing out fossil fuels

At the UNGA, the UN adopted the “Pact for the future,” calling for transitioning away from fossil fuels and accelerating nature-based climate action^[6]. The phase-out of fossil fuels and the transition to a green economy gained significant momentum at Climate Week itself, as the topic was prominently discussed in flagship sessions and featured events^[7].

What this means for business

The reiteration of the “phasing out of fossil fuels” may translate into national regulations, sooner rather than later. Companies should engage with their stakeholders and start communicating on their transition journey.

Climate and nature nexus

Nature also gained attention, as participants focused on the role of the private and public sectors in achieving the global goal of reversing nature and biodiversity loss by 2030. As the next event on nature, COP16, is about to happen at the end of October in Cali, Colombia, businesses should be prepared for new developments on the topic. The last COP15 in Montreal adopted the Global Biodiversity Framework, which set the crucial targets in nature and biodiversity conservation, including 30% conservation of land, sea, and inland waters, 30% restoration of degraded ecosystems, as well as $500 billion/year reduction in harmful subsidies^[8].

What this means for business

Companies should implement a commitment to minimise their negative impact on nature and apply the Taskforce on Nature-related Financial Disclosures (TNFD) framework to identify their impacts and dependencies. Equally, they should be communicating their nature impact stories to stakeholders.

Human rights and inequality

Climate Week discussions underscored the interrelationship between climate change, human rights, and inequality. The concurrent launch of the Taskforce on Inequality and Social-related Financial Disclosures (TISFD) emphasised the need to address socio-economic inequality through improved transparency in corporate and investor actions^[9].

What this means for business

With EFRAG signing a cooperation agreement with TISFD to promote social-related financial disclosures, there is a growing likelihood that some jurisdictions might adopt TISFD guidelines^[10].Companies can begin their journey by identifying inequality and social-related impacts, dependencies risks and opportunities.

Climate Week underscored the urgent need for businesses to take decisive action on climate change. The event highlighted the importance of comprehensive transition plans, just transition strategies, renewables, and nature-based solutions. Beyond these core themes, Climate Week also showcased the growing expectations from stakeholders for companies to take action. Investors, consumers, and civil society groups are increasingly demanding transparency and accountability from businesses on climate-related issues. Companies must go beyond regulatory compliance and actively engage with stakeholders to build trust and support.

What could companies do
 

1. Conduct a Double Materiality Assessment (DMA).
2. Evaluate the materiality of climate-related risks and opportunities to your business, both financially and strategically, but also use the DMA as a stakeholder engagement exercise.
3. Set ambitious targets and develop decarbonisation plans. Establish clear goals for reducing greenhouse gas emissions and create detailed, costed plans to achieve them. Make sure to follow the required transition plan guidelines adopted in your jurisdiction (for instance TPT in the UK).
4. Adopt a holistic approach that integrates climate action into your overall business strategy.
5. Engage Stakeholders. Gain buy-in from employees, investors, customers, and other stakeholders by effectively communicating the importance of climate action and the benefits of a transition to a low-carbon economy.
6. If your company has a nature impact, explore the TNFD framework to assess your nature footprint and identify areas for action.
7. Stay informed about the evolving landscape of regulations and reporting, including the recently launched TISFD.

These actions may be underway for most responsible and forward-looking businesses. However, as the world continues to grapple with the challenges of climate change, and events like Climate Week, COP29 and COP16 are accelerating the transition to more sustainability business practices, companies need to engage stakeholders on these actions and plans and share their impactful stories. Continued stakeholder engagement, not only with investors and shareholders, but also with employees and suppliers, is key to ensure that a company’s sustainability strategy will not only be understood but also implemented.

If you would like to find out more about how Black Sun Global can help you to better engage your stakeholders around your sustainability efforts please do get in touch with Sarah at enquiries@blacksun-global.com

[1] NASA, NASA Finds Summer 2024 Hottest to Date, (2024).

[2] Ibid.

[3] The Guardian, World’s top climate scientists expect global heating to blast past 1.5C target, (2024).  

[4] International Energy Agency, Investment in clean energy this year is set to be twice the amount going to fossil fuels, (2024).

[5] CDP, The State of Play 2023 Climate Transition Plan Disclosure, (2023). 

[6] UN, Pact for the Future, Global Digital Compact and Declaration on Future Generations, (2024).

[7] Climate Week NYC, An introduction to The Hub Live, (2024).

[8] UN Environment Program, Kunming-Montreal Global Biodiversity Framework, (2022).

[9] The Taskforce on Inequality and Social-related Financial Disclosures (TISFD).

[10] EFRAG, EFRAG and TISFD Sign Cooperation Agreement to Advance Social-Related Financial Disclosures, (2024).