Intensifying scrutiny has boosted corporate action in the oil and gas arena. And with stakeholder pressure growing, COP26 could up the ante even further and accelerate the pivot to a low-carbon future.
This week’s COP26 briefing explores the main themes at the conference from the perspective of corporates. Fill in the form to access the complimentary report, or read on for a quick overview.
More ambitious country-level targets will accelerate corporate action
Corporates will be paying close attention to countries’ post-2020 climate actions in the form of their Nationally Determined Contributions (NDCs). These set targets for reducing a country’s greenhouse gas emissions. More ambitious NDCs, combined with growing investor pressure, will act as a catalyst for stronger corporate climate measures. That’s likely to increase focus on indirect Scope 3 emissions reduction and force more companies to diversify or divest away from oil and gas.
Article 6 sign-off will enable a carbon business stream
Achieving net zero is virtually impossible without offsetting carbon emissions from high-carbon sectors such as oil and gas. Article 6 of the Paris Agreement aims to address this by creating an international framework for emissions trading.
Resolving Article 6 should therefore pave the way for global carbon markets and incentivise the commercialisation of carbon capture and storage (CCS) technology. Commercial-scale CCS could contribute 20% of global emissions reduction.
Standardised corporate climate disclosure will be critical to net zero success
The stakes are high for corporates, with more than a quarter of value at risk from direct Scope 1 and 2 emissions alone, at the higher carbon prices needed to achieve net zero. With that in mind, there are growing calls for corporate climate disclosure to be made more transparent and standardised across sectors and regions. The requirements set out by the Task Force on Climate-related Financial Disclosures (TCFD) are already mandatory for UK premium-listed companies; expect other jurisdictions to adopt them in the wake of COP26.
What’s inside our weekly COP26 briefing?
Our report on the corporate response to COP26 is the twelfth of a series of weekly briefings in the run up to the start of the conference on 1 November. Each report includes:
• Key takeaways
• Charts and tables
• Where to find more information
• How Wood Mackenzie can help your business with issues raised.
Source: Wood Mackenzie