After two weeks of thorough engagement and intense negotiations, the recent COP26 conference concluded with evidence of some progress. This annual United Nations event, the 26th of the Conference of the Parties to the UN Framework Convention on Climate Change, carried more expectations this year as many of us emerged from the isolation of COVID-related restrictions and re-engaged on a global platform with renewed urgency toward environmental topics. For many attendees, myself included, this was the first international engagement we had after many months of pandemic delays.
The results from COP26 may not be as satisfying as many had hoped for, but significant progress and urgency was reflected in the final agreed resolutions. Key developments include plans for international standards for sustainability reporting, renewed commitment from wealthy countries to provide funds to developing economies, and planned development of a global carbon market.
COP26 President, Alok Sharma showed some concern on progress at the conclusion of the event, referencing the limit for global temperature rise, “We can now say with credibility that we have kept 1.5 degrees alive. But its pulse is weak, and it will only survive if we keep our promises and translate commitments into rapid action.”
Making progress toward new sustainability targets will be a crucial activity for leading companies in the process industries. For some, they are impacted by the updated commitments made by the countries where they operate. As countries looked ahead to the next few decades and defined their plans referred to as nationally determined contributions (NDC), local companies must also comply with newly established targets.
As noted by many energy and chemical companies, 2050 is not far off in the life of major assets. Importantly, to move toward more demanding national targets, updates of NDC plans will now move toward annual reporting following COP26, instead of five-year updates previously.
Many companies are setting targets to lower emissions and waste, as well as developing and evaluating new technologies to meet sustainability targets. ” But now that the target setting has been done, execution toward those goals is required. Now companies need to align goals with plans, says McKinsey, “Net-zero commitments are outpacing the formation of supply chains, market mechanisms, financing models, and other solutions and structures needed to smooth the world’s decarbonization pathway.
Financial markets are expecting targets and will begin to demand progress toward aggressive climate action goals. Speaking at a Deutsche Bank event at COP26, the Deutsche Bank CFO emphasized that companies “need to demonstrate credible performance with interim checkpoints. You can set 2050 goals, but we must see progress by 2030, 2035, or it is greenwashing.”
Increasingly, company goals and progress extend beyond localized operational activities and energy sourcing to include others in the industry value chain. This engagement is enabled by the visibility of company operations, and through the supply chain to first optimize, and then possibly redesign to meet demanding emissions and waste reduction targets. It is this integration across the value chain that can drive significant progress: “If we want to move fast, we have to move together. I cannot say I am green if I have left my supply chain behind,” said Antonia Gawel, Climate Action lead at the World Economic Forum, speaking at the COP26 EU side events forum.
We were reminded of the importance of collective progress by Sylvester Turner, the mayor of Houston and the chairman of the global network Resilient Cities, which works to raise awareness, foster cooperation and deliver resilience to urban communities threatened by climate change. Speaking at one of many climate-focused events organized by Wood Group, Turner expressed, “We are all connected. Climate change has no boundaries.”
AspenTech is actively working to help our customers move quickly to meet their increasingly urgent sustainability goals as well as those of the countries where they operate. We have many active projects worldwide – from short-term emissions reduction projects, to alternative feedstocks for energy and chemicals, to new technologies for hydrogen production, carbon capture and plastics recycling. Our enabling technologies help companies accelerate the innovation they need to lower emissions and waste, and to develop future technology solutions. We have developed more than 50 sample models for a variety of applications to help companies jumpstart their efforts to address sustainability targets.
Another important role we play is sharing success stories so companies can learn from each other and shorten the timeframe to develop and deliver better solutions. We have many valuable examples that are shared through webinars, case study reports and at regional and global user events. A few recent examples include:
- BPCL Mumbai Refinery Enhances Energy Management Using AspenTech Solutions
- 5 Digital Strategies for a Circular Economy
- Digital Supply Chain Helps FPCO Reduce Emissions and Waste and Meet Sustainability Goals
- Helping Customers Innovate to Meet Sustainability Goals and Drive Operational Excellence
As a scientist, I must acknowledge that my favorite comment heard around COP26 came from U.S. climate envoy John Kerry. When declaring now as our “decade of action,” he emphasized that “climate action has no affiliation or ideology. It is about arithmetic and physics.” Building from momentum gained at COP26, it is time for climate action.