By Shauna McGinn

The 2021 United Nations Climate Change Conference, or COP26, in Glasgow, Scotland officially came to an end this weekend. For the past couple of weeks, nations from across the globe have negotiated on some of the most pressing climate change issues of our time, from coal production to methane emissions. At 5REDO, we’re always paying close attention to actions in the climate change and circular economy space. Here’s what some of the core agreements and issues at COP26 could mean for the circular economy here in Canada and around the world.

General highlights
Fossil fuel and coal production agreement
Led by the U.K., this deal was initially intended to push nations to accelerate the phasing out of coal production and various fossil fuel subsidies. Some advocates claim the language within it was ultimately “watered down”, calling for movement towards “low-emission energy systems” and doing away with “inefficient subsidies for fossil fuels”. While this isn’t as strong of a push as originally hoped for, specific mention of targeting coal and fossil fuels has yet to even be part of a COP agreement until now.

Curbing methane emissions
More than 100 countries have signed on to the Global Methane Pledge, a commitment to cut methane emissions by at least 30% by 2030. Brazil as well as Canada, two of the world’s major methane producers, have signed on.

Addressing deforestation
There is a similar outlook for the issue of deforestation, with over 100 nations again setting the target of 2030 for ending it entirely. Although this is a big goal, billions have been earmarked by participating countries to help achieve it.

What does this mean for Canada and the circular economy?
The agreements at COP26 and other climate forums have the potential to accelerate the shift to a circular economy, meaning a structure that prioritizes innovation, sustainability, and greater use of and reliance on renewable resources. Many of the goals named at COP26 have to do with cutting emissions, as well as the use of environmentally harmful methods. This means that we need alternatives to the traditional way of doing things.

If many countries, including Canada, are aiming to rely less on the traditional way, industry will be further pushed to innovate and find sustainable ways to produce and deliver energy. Simply put, shifting to a circular economy can not only help cut emissions, but help transition nations and businesses to a system that is better for our climate and can help meet the kinds of goals set at COP26.

Better targets for reducing greenhouse gas emissions
Canada upped its previous pledge to decrease greenhouse gas emissions from 30% to 40% by 2030. Some of the top emitters of greenhouse gases are things we use and rely on every day, like transportation (with traditional combustion engines), electricity, and heating. The circular economy means re-working some of these major emitters through innovation, extending and better utilizing all products throughout a supply chain, and changing our approach to consumption and waste.

More dollars behind clean energy
Although the conference’s pledge on coal and fossil fuels isn’t, by some accounts, as strong as it needs to be, some countries including Canada, the U.S., and the U.K., alongside top financial institutions, committed to ending international development financing for coal, oil and gas by the end of 2022, as well as prioritizing clean energy finance. Ideally, this would mean a greater boost for organizations, companies, and others innovating in the circular economy and renewable energy space. This will help accelerate change, and direct resources where they need to go.

Explicit standards for sustainability
A less discussed, but intriguing move out of COP26 is the announcement of the International Sustainability Standards Board (ISSB), established by the International Financial Reporting Standards (IFRS) group. They’re calling this board “a comprehensive global baseline of high-quality sustainability disclosure standards to meet investors’ information needs.” Finance ministers at the conference, including those from Canada, welcomed the agreement. While it’s still unclear how this will be regulated, this shift indicates a desire for greater transparency about what financial institutions and companies are doing for sustainability.

At 5REDO, one of our priorities is to help businesses better see and understand their environmental impact. As the ISSB suggests, some companies may soon be asked to disclose the dollars behind their sustainability efforts, which could become the norm going forward. It’s a signal that industry must begin to build greater awareness of the environment and sustainability.

Although conferences like COP26 often draw criticism for not taking enough concrete action, they serve as a checkpoint for us to understand more about the urgent issues and priorities in the climate crisis. As with others in the circular economy space, at 5REDO, we’ll be keeping a close eye on how the ideas, agreements, and pledges from COP26 continue to evolve.

Resources & further reading