This week, we are taking a break from our ESG Development Heatmaps to discuss some key developments that have happened in the 27th Conference of the Parties to the United Nations Framework Convention on Climate Change (COP27). This is a continuation of the COP26 convention held last year and the goal is to renew solidarity among countries to fulfill the Paris Agreement.
The greatest concern so far has been the severe delay in the fulfillment of previously established commitments, and the lack thereof, of new ones, as humanity struggles to keep global warming at or below 1.5 degrees Celsius.
Where does Mexico stand?
Mexico made several promises this year, ceasing to be the only country in the G20 without ambitious commitments on environmental issues. Having said that, these promises will require a lot of effort and Mexico did not present any roadmap that shows how it intends to achieve these goals. Thus, the next logical step for the country would be to formalize the calculation, monitoring, and reporting of progress.
The key commitment from the Mexican government was it would work to accelerate processes to reduce greenhouse gas emissions and increase renewable outputs by 2030 through investments of 48 billion dollars. This includes:
- A commitment by Mexico and Pemex to eliminate routine flaring and venting of emissions in oil and gas operations, backed by an implementation and investment plan of close to US$2 billion,
- Shifting 50 percent of vehicle sales to zero-emission vehicles by 2030,
- Deploying more than 30 additional gigawatts of combined wind, solar, geothermal, and hydroelectric capacity by 2030.
The United States expressed its intention to work closely with Mexico to achieve these ambitious goals through the mobilization of financial support and joint efforts to catalyze and incentivize investments that will foster the new deployment and transition of renewable energy in Mexico.
Is this relevant to your business?
It is likely that over time carbon-intensive activities are going to become increasingly expensive due to new taxes, regulations, or quotas. Thus, it is likely going to make business sense to eventually de-carbonize your business activities as much as possible, especially if you are operating a carbon intensive business.
The time for change if we want to limit the impact of climate change to our planet is now. The COP27 convention, as well as many other such events, might seem like very theoretical to you. In a sense they are, but as climate risks increase and impacts to our daily lives are more visible, you bet some very important stakeholders are starting to pay more attention to them.
I hope you found this interesting. As usual, if there is anything we can help you with, or if there is an ESG topic you would like to know more about, please let us know.
CEO, Miranda ESG
Contacts at Miranda Partners