With COP27 just around the corner, there has been plenty of speculation from media outlets and businesses alike on what will happen at the event and what progress can be made to better protect our planet from climate change. At Sustainable Future News we have come up with a wishlist of what we want to see in Sharm El Sheikh.
Evolving from COP26
The two main outcomes of COP26 were the signing of the Glasgow Climate Pact and agreeing on the Paris Rulebook. The Glasgow Climate Pact is a series of decisions and resolutions that build on the Paris accord, setting out what needs to be done to tackle climate change. However, it doesn’t stipulate what each country must do and is not legally binding.
The Paris Rulebook sets the guidelines on how the Paris Agreement is delivered. A focus of COP26 was to secure an agreement between all the Paris signatories on how they would set out their nationally determined contributions (NDCs) to reduce emissions.
Other areas of commitment included forests, methane, car emissions, and private finance were also made. The commitment from 137 countries was to halt and reverse forest loss and land degradation by 2030.
However, a recent damning report conducted by the United Nations (UN) argued current global emission reduction commitments are insufficient to limit warming to 1.5 °C above pre-industrial levels and avoid the more significant impacts of climate change.
Climate change is a global issue and therefore needs to be addressed as such. How will COP get commitments to deal with this globally and legislation to hold every country accountable?
Greenwashing accusations and scandals have flooded the news recently, not least Coca-Cola’s sponsorship of COP27. With that in mind, it could be wishful to think it will be raised as an issue that needs addressing but it is something we would like to see spoken about at COP to limit further cases in the future.
The expectations of COP27 are being overshadowed by a global energy crisis sparked by Russia’s unprovoked war in Ukraine. This is a very immediate issue, so is the Paris Agreement achievable and how do countries plan to continue with their net zero pledges with the energy crisis currently unfolding?
COP for the world
At this year’s COP, we want to see detailed plans for how developed nations will make good on their funding plans for developing nations. Representatives of Africa have warned they need time and money to wean themselves off fossil fuels in order to achieve net zero without jeopardising its future ahead of COP27.
For example, Ghana’s deputy energy minister Mohammed Amin Adam recently argued international green energy investment in Africa was “still appalling”, accounting only for about two % of the global total.
“African countries need to secure financing for oil and gas projects, as fossil fuel revenue is needed to finance climate adaptation measures,” he continued. “If we give up this, how do we even finance our ability to adapt to the climate effects? We cannot. Unless we have a substitute for our revenue.”
Africa is one of the most impacted continents of climate change, with rising temperatures worsening droughts and floods, despite only being responsible for around three % of global CO2 emissions.
Environmental, social, and corporate governance (ESG) is a collective term for a business’s impact on the environment and society as well as how its governance is in terms of company leadership, executive pay, audits, internal controls, and shareholder rights. It measures how businesses integrate ESG into their operations.
However, the effectiveness of ESG has been called into question after a KPMG survey found chief executives are sidelining ethical and green goals as they focus on shoring up their businesses ahead of a potential recession.
The COP conference cycle represents an opportunity for public policy reform to reflect the legal and regulatory realities faced by investors. The commitments taken during the conference have the aim of bringing the commitments made through the Paris Agreement closer to reality. The decisions taken by governments should represent the highest standard of commitment to addressing the climate crisis. Public policy must pave the way and set the new rules of the game. Investors should then discharge their fiduciary duty effectively, to better navigate the broader risks our societies and economies are facing.
COP27 is a chance for governments to send stronger signals to investors. Led by a developing economy this year, with high stakes in addressing effectively and rapidly the unfolding climate crisis, the conference’s aim should be to create a level playing field for us all, by helping to make financial flows consistent with low greenhouse gas emissions and climate-resilient development.
It’s important to be clear on the shared stakes. Currently, we all need to do more to address the increasing urgency of the climate crisis. Awareness among investors is growing – increasingly they’re conscious that ESG is not and should not be an afterthought in the investment process, but rather a core tool, used to systematically support the best investment decisions for the world, both today and in the future.
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