The COP28 climate summit in Dubai brought together voices from nearly every country on the planet. In the end, they agreed on a resolute and unprecedented commitment: transitioning away from fossil fuels.
For many, this important decision marks the beginning of the end of the fossil fuel era, and one step closer toward mitigating climate change and fostering hopes for a sustainable future.
However, the feasibility of this ambitious transition poses a number of critical challenges. With this in mind, GHD’s Tej Gidda and Greg Carli are sharing key insights from their participation at the conference and provide a nuanced perspective on the challenges and opportunities ahead.
Addressing the action-promise gap
One recurring theme highlighted at the summit in Dubai was the persistent gap between environmental promises and actual actions. There is a growing and urgent need to align rhetoric with tangible efforts.
The recently-released GHD Sustainability Monitor report reveals heightened concerns among corporations regarding reduced sustainability commitments due to economic uncertainty. Two-thirds of the 550 global senior executives surveyed for the report expressed the need for government intervention, citing challenges like lack of investor buy-in and a clear transition plan. One-third of respondents in Canada cited the need for specialty skills to achieve their sustainability goals, and over a quarter of respondents cited the need for stakeholder engagement, clearer metrics, and reporting mechanisms.
The concerns are shared globally, with over three-quarters of respondents sharing the belief that a moderate or significant gap exists between what they are trying to achieve and what’s being implemented. For GHD, the keys to closing this gap rely on actioning sustainability ambitions, building stakeholder trust and collaboration, and leading with social engagement.
The time for action is now
The urgency of climate action was emphasized throughout COP28 and remains one of the most pressing concerns around the world. There is a serious need for society, governments, and industries to accelerate their efforts. One way to use this urgency as a catalyst for reducing emissions is to re-engineer supply chain strategies from top to bottom.
GHD’s sustainability report also revealed that while sustainability is adding commercial value to corporations, they strive to pursue mainstream progress through low-cost, high-impact and quick-win choices. With sustainability central to vision and strategy, organizations are feeling challenged by the task of integrating and infiltrating the mindset across the business, as well as supply chains. Embedding sustainability at the front-end of thinking rather than a bolt-on is paramount, with the need for better communication that helps to apply it to everyone’s day-to-day role.
Supply chain engagement is key to closing the gap
Rethinking supply chain strategies is crucial for achieving enterprise-wide emission reduction goals. Decarbonization is one of the biggest challenges organizations are facing. Better collaboration through upskilling and retooling the supply chain points to a way forward. Defining clear change management and behaviour-related programs can influence and educate employees and stakeholders along the supply chain. Designing a proactive stakeholder plan that aligns thinking, targets and approaches — across all supplier and vendor activities — means everyone gets on the same page. Also, having tools and programs in place to generate meaningful feedback and create consistency across stakeholders helps to understand better and fix information gaps.
The role of governments and corporations
Governments and corporations must undergo fundamental changes to foster innovation, agility, and collaboration. For the latter, building stakeholder trust and collaboration can be achieved by gaining consensus on setting the path forward to more sustainable outcomes. From operations to the C-suite through to supply chain partners, collectively scoping and identifying new growth opportunities that can be created by aligning targets and goals with jurisdiction regulations is key. Waiting until mandates and guidelines are passed or relying on the introduction period to get organizations up to speed will take too long to capitalize on the real opportunities to move forward.
Implications to Canada
Canada is rich with fossil fuel and renewable resources, a combination that has fueled the past and has great promise for the future. The phase-down/phase-out of fossil fuels will have an impact on the traditional oil and gas industry in Canada, but likely in a non-linear fashion. The need for reliable, secure energy remains constant and fossil fuels will remain in play up to the Net Zero target of 2050.
However, Canada is also rich with renewable resources that can play a part in its domestic decarbonization goals, with the opportunity to export excess decarbonized energy to the rest of the world. We can expect to see more renewable energy projects, especially as the Federal carbon tax progresses to a high point of $170/tonne by 2030 — a strong motivator for continued decarbonization.
In many ways, Canada is an excellent example of the potential for a home-made energy transition from traditional energy to future energy. Having a plan that you can action on to guide your organization through these transitional times is critical to ensuring your business success over the coming years.
Balancing mitigation and adaptation
COP28 underscored the disproportionate impact of climate change on vulnerable communities. To achieve a fair transition away from fossil fuels, it is critical to ensure an equitable transition for all nations, avoiding disproportionate burdens on developing countries. International cooperation and support mechanisms must play a central role, with developed nations taking the lead in providing financial aid, technological assistance, and capacity-building initiatives.
Global policies must be re-evaluated to foster equity, recognizing nations’ differentiated responsibilities and capabilities regarding emission reductions and the transition to renewable energy. Realistic and achievable targets, transparent reporting, and monitoring mechanisms are essential components.
Addressing social and economic implications is integral to an equitable transition. Safeguarding the livelihoods of communities reliant on the fossil fuel industry requires a just transition for workers and vulnerable populations. Efforts should focus on retraining workers, creating new job opportunities in the renewable energy sector, and supporting affected communities to prevent socioeconomic disparities.
Despite the formidable challenges ahead, the imperative to transition away from fossil fuels demands global solidarity and concerted efforts. Innovations in technology, coupled with political will and international cooperation, offer hope in achieving this monumental task.
Dr. Tej Gidda is GHD’s Vice-President and Global Leader for Future Energy, and Greg Carli is GHD’s Global Advisory Leader ESG, Sustainability & Resilience.
Featured image credit: Getty Images
