No prizes for guessing what the big story in sustainability is this week.

The agreement reached at an extended COP28 for countries around the world was billed as historic, being the first time in three decades of the summit that an agreement has vowed to tackle fossil fuel dependency directly.

Predictably, it drew continued criticism of the oil-rich United Arab Emirates being chosen to host the event, and that the wording of the agreement amounts to a ‘transition away from’ fossil fuels rather than a total phasing out.

It comes down to the transition, ultimately, being optional. But on the other hand, the fact that any kind of agreement to transform has now been reached is surely a big step forward - though critics may question why it has taken the UN event the best part of 30 years to get here, and to what extent the nailing of the agreement was stage managed.

Whether or not countries and trading blocs adopt firm commitment to transition by certain dates, the question also remains over how this will be funded. As the Financial Times put it, the agreement had a “lack of detail on how porter countries with large debt piles will finance a shift from fossil fuels and adapt their economies to global warming”.

But whatever its shortcomings, it is hard for the deal not to be a turning point. Countries may have differed in sticking to the Paris agreement of 2015, but the new one should draw greater scrutiny and force more transparency, given its seismic nature. Perhaps hosting it in the UAE will turn out to be for the best after all.

For companies committed to their own transitions, all of the wrangling may not seem like it makes much of a difference, beyond underlining the need for sustained action. What it does do is set the world on a clearer course.

And the UK Government reaction? Well, it was preoccupied with the vote on the Rwanda asylum seeker bill this week - and the COP news knocked that off many front pages - but the response from the Environmental Audit Committee was fairly robust. Disappointed that the agreement hadn’t gone further and committed to a phasing out, its chair said that the “UK must approach the low carbon future with enthusiasm and unwavering commitment”.

The fallout from the agreement is likely to last for some time. Providing the commitments continue to be reaffirmed, we can expect ESG reports, sustainability communications and annual reports to reference it - and updates on progress against goals to reflect it - for some time.

The ESG News Review is written by Steve Earl, a Partner at PR agency BOLDT.

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