COP 28 Climate Summit & CO2 Emissions: What the Results Mean for Your Sustainability Strategy 

Hopes for clear global guidelines on carbon compensation were high – but the results remained vague. After 14 days, COP 28 in Dubai has now come to an end. It continues to leave companies in the dark as to what specific recommended actions regarding CO2 emissions and offsetting arise from Article 6 of the Paris Agreement. 

 

However, climate change continues to progress, which begs the question: how do companies and countries deal with it when time to act is running out and there are no binding targets? We summarise what the participants at the UN Climate Change Conference agreed on and how you can respond. 

 

Are you interested in offsetting your CO2 emissions in a safe and efficient manner and would you like to find out more about the best strategy for utilising carbon credits? Then read our Carbon Credit Guide! It will show you how to use carbon credits to benefit both the environment and your company. 

COP 28 Provides Little Clarity on Carbon Offsetting 

Reporting on COP 28 has been dominated by the issue of phasing out fossil fuels. In the final multilateral agreement, there was an explicit reference to the “transition away from fossil fuels in energy systems”. This was something that had never mentioned done before and is thus regarded by many as groundbreaking. 

 

EU Commission President Ursula von der Leyen even spoke of “good news for the whole world”. Others see the passage as a weak signal without any real impact. This is primarily because the financing of the fossil-free transition1, which will cost more than 4.3 trillion US dollars per year, still remains unclear. 

 

Do you know your product carbon footprint and how it relates to Scope 3 emissions? Read our blog post entitled “Your Path to Market-Based Carbon Offsetting” to discover how this metric is calculated and why it is so vital for your climate protection strategy. 

 

Interpreting Article 6 Continues to Cause Headaches 

The situation regarding Article 6, in particular 6.4, is also rather vague. Unfortunately, the conference participants were unable to agree on a final text. Article 6 of the Paris Agreement allows countries to collaborate across borders in implementing their climate protection contributions. This enables countries, for example, to exchange emission reduction certificates with each other in order to achieve climate protection targets.2 

 

However, it is not obvious what this should look like in practice. In particular, the emissions trading framework conditions mentioned in Article 6.4 have not been further specified. International trading in emission reduction certificates is set to be expanded from 2024 in accordance with the Paris Agreement. 

 

It should be noted, however, that this will be difficult without transparent rules and guidelines. Companies and entire countries are justifiably unsettled, having been left without a solid basis for making decisions about their CO2 emissions and communicating them. The best example of this is the widespread concern about often unintentional greenwashing through the use of words such as climate-neutral, green, or climate-friendly. 

The Importance of the Voluntary Carbon Market for Climate Protection 

There was also some good news! Politicians have recognised that the voluntary carbon market (VCM) is an important and effective instrument in the fight against climate change. 

 

Following the conference, representatives from various sectors of the carbon market emphasised their desire to promote the VCM through numerous initiatives. The declared goals are as follows: 

 

  • Speed up action: With its diverse and flexible investment opportunities, the VCM makes it easier for stakeholders to actively participate in climate protection and take meaningful action. 

  • Increase global ambitions: The VCM provides positive incentives such as additional funding for climate protection projects and the transfer of innovation and technology. 

 

COP 28 in particular has made it clear that the global energy transition can no longer be financed by national public budgets alone. Private capital is urgently needed to invest in more environmentally friendly alternatives, which is why the phase-out of fossil fuels can only succeed if countries and companies join forces. This is also why we need the voluntary carbon market as a platform for private investors. Article 6 of the Paris Climate Agreement lays the foundation for this – albeit rather vaguely. 

  

The Consequences of COP 28: Sitting Back and Waiting Are Not an Option 

 

Anyone expecting an unambiguous position on carbon emissions from COP 28 was left disappointed, although the UN bodies are continuing to work actively to ensure a clearer framework in the near future. However, the answer to a lack of clarity must not be a lack of action. There is only a little room for manoeuvre left and we should use it courageously. Now more than ever, the planet needs companies that will adopt a proactive approach to their sustainability strategy, even if policymakers provide little guidance for legally compliant action. 

 

How can this be achieved? By (continuing to) offset your unavoidable CO2 emissions with carbon credits and taking your lead from experienced players such as the VCC Desk at thyssenkrupp Materials Services with tried-and-tested best practices.

3 Recommendations for a Forward-looking Sustainability Strategy 

  • Even if political decisions take time and there is not yet absolute clarity in the VMC, climate change is progressing. And so should your sustainability strategy. 

  • Your company is making an important contribution with climate projects supported by the VCM. These projects have a positive impact on many levels: socially, for biodiversity, and for regional development. Don't let yourself be put off: pay attention to the quality of the selected projects in line with the Oxford Principles. 

  • Continue to work on reducing CO2 emissions beyond procurement. This will steer your sustainability strategy in the right direction. 

 

How to Avoid Greenwashing 

Many companies also fear unintentional greenwashing when communicating their sustainability measures. As there are no clear legislative requirements, it is difficult to say which statements and terms could be interpreted as greenwashing without extensive experience. 

 

We advice to not experiment and recommend conservative communication. Be honest and direct about the measures you are taking. Do not use terms such as “climate neutral” or “green”, and generally avoid overclaiming. This refers to any kind of exaggeration or distortion with which you attribute characteristics or effects to measures, products, or your company that they do not actually have. 

3 Recommendations for Greenwashing-free Communication 

  • A climate strategy without any of your own reduction efforts is greenwashing. For this reason, always be transparent about how you (want to) reduce greenhouse gases. You should also avoid claims that a product has a neutral or positive impact on the environment because the manufacturer offsets the emissions. 

  • Refer to the discrepancy between the desired climate and greenhouse gas neutrality and unavoidable greenhouse gas emissions. 

  • Emphasise that you are voluntarily offsetting these unavoidable CO2 emissions beyond the value chain as this is an effective way of achieving good results. 

 

Invest in Sound Processes and Carefully Selected Projects 

At thyssenkrupp Materials Services, you'll find proven processes and carefully selected projects that not only have a positive impact on CO2 emissions, but also on social factors and biodiversity. We possess experience in strategy and communication, allowing us to help you overcome challenges and make an effective contribution to climate protection. 

 

  • Is the regulatory environment constantly evolving? We support you in adapting your strategy and acting in a proactive manner. 

  • Don’t have the time or resources to follow the public debate? We keep our finger on the pulse for you. Through continuous training and active participation in relevant events, we are continually broadening our expertise so that you remain on the safe side. 

 

Get in touch today to arrange a free consultation!