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COP28 Is a Business Bonanza. Should It Be?

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The question from Jesper Brodin—CEO of the Ingka Group, IKEA’s parent company—for Germany’s deputy climate envoy was fairly simple: “How can we support you?” Speaking in a discussion at COP28 I moderated in the first days of this year’s climate talks in Dubai, Brodin wanted to know how businesses could aid the negotiators pushing for an agreement to phase out fossil fuels.

The answer from Norbert Gorissen, Germany’s deputy special envoy for climate action, tells us a lot about the role of the private sector at COP28, and the role of business in the climate movement more broadly. Policymakers hear a range of private sector views, he said, creating a “competition of various voices” to be considered the true representative of the corporate world. “We need a better-consolidated, strong voice from the private sector on a global level,” he said. In other words, the business voice is fragmented by different viewpoints; speaking in unison would yield greater results. 

The COP28 presidency has placed the private sector at its center unlike the organizers of any previous U.N. climate talks. In doing so, it is forcing COP participants to grapple with the thorny question of just how corporations can or should fit into the annual conference. 

For some longtime COP observers, this is a well-timed innovation. To meet our emissions targets, they say, the climate talks need to move beyond negotiation halls to catalyze the real economy. And indeed, some companies come to COP having earned true green credentials, not only by decarbonizing their businesses but also by supporting government policy to push others to do the same. 

For others, the business presence—including some of the biggest emitters—represents a cheapening of the process. There are certainly some companies that come with little to show—and no intention of pushing for helpful government policy. This is a distraction from the main task at hand, some observers argue, namely brokering an agreement to wind down fossil fuels.

Keeping track of all of this remains a difficult task. And, no matter what happens in the final days of COP28, additional work remains to be done to figure out the best way to incorporate the private sector into U.N.-led climate conversations.

Read more: The COP28 Outcomes Business Leaders Are Watching For

From their beginnings nearly 30 years ago, U.N. climate conferences were meant to center around countries. It is the United Nations, after all. And, while some business representation has existed from early on, corporate officials were largely meant to stay on the margins. But the presence of companies at the conferences has grown rapidly in the eight years since the adoption of the Paris Agreement. The landmark deal set a voluntary framework by which governments are meant to create increasingly ambitious climate policy, but in many large economies success depends to a significant degree on activating the private sector. And so the officials running the last several climate negotiations have increasingly incorporated businesses into the run-of-show—and big companies have eagerly embraced the invitation.

It should come as no surprise that organizers of this year’s conference in Dubai doubled down. The city has become a global business and financial hub by catering to the private sector. Sheikh Rashid bin Saeed Al Maktoum, the Emirati founding father credited with launching Dubai on its breakneck development trajectory, summed up his philosophy with a quippy ode to business: “What’s good for the merchants is good for Dubai.” Meanwhile, the COP presidency held by oil CEO Sultan Al Jaber has described his approach as a “business mindset” from the time he was appointed.

The result has been a slew of initiatives, partnerships, and deals launched during the conference. The U.A.E., for example, launched a $30 billion climate fund with top financial services companies to invest in clean technology, with a commitment to set aside some of that funding to flow to the Global South. And an alliance of oil and gas firms committed to end routine flaring and come close to eliminating methane emissions by the end of the decade.

And then there are the behind-the-scenes discussions: having private sector players at COP alongside government and civil society allows for the stakeholders to sort through challenges that would be difficult in a virtual context. “We’ve been seeing for a while now more and more businesses involved at COP,” says Nat Keohane, president of the Center for Climate and Energy Solutions, an environmental policy think tank. “What I’ve seen here is that those conversations are really oriented toward implementing solutions.”

Supporters of Al Jaber’s approach say he has used his convening power and long-running stature among companies and financiers to create the necessary climate for these deals and tough conversations. Opponents say that both voluntary commitments and dealmaking, however necessary, don’t need to be done on the ground at COP—that it’s a distraction from the urgent need to get the policies right. “The time has long since passed when the world can be satisfied with voluntary pledges that are self monitored, with bright shiny objects designed to distract the world from the main task at hand,” Al Gore told me on Dec. 5.

Some companies are keen to engage in the policy conversation. The We Mean Business Coalition organized a letter calling for the phaseout of fossil fuels ahead of the conference with more than 200 signatories, including large companies like IKEA and AstraZenca. At the same time, there are more than 2,400 delegates at the conference affiliated with the fossil fuel industry. As Gorissen said, it can be hard to discern who really represents the broader business community.

Ultimately, most executives here say they have little stake in the result of the negotiations that come out of the conference. This is perhaps unsurprising. The language is for the most part non-binding and directed at countries. And most companies, even those working hard to decarbonize their own operations, generally stay away from climate policy debates unless they have an immediate effect on their bottom line. A study published last month looking at 300 large companies by the watchdog group Influence Map found that 58% of those studied are at risk of “net zero greenwash” because they don’t lobby in alignment with the net zero target that they say they are pursuing. 

The primary focus, executives say, is to meet counterparts, do deals, and show their commitment to the climate issue. That last point has drawn particular criticism from many here who say that using COP to prove green credentials is an opportunity that should only be open to companies who have proven their climate chops, perhaps by meeting criteria set out last year by a U.N. working group convened to study the topic. 

This debate is tricky. How do you demand seriousness without requiring perfection? And is COP even the best place to engage in those conversations? The debate won’t be settled in the next few days. Indeed, we should only expect it to grow as climate change becomes increasingly relevant for companies.

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