As November approaches, anticipation mounts for the United Nations 26th annual climate change summit (COP26), which is being touted as the most important climate change event since the 2015 Paris Agreement.
With the event to be held in Glasgow, the UK will be in the spotlight as world leaders unite to continue the work left unfinished by COP25 and to review countries’ progress since the 2015 targets were set.
Why is COP26 so highly anticipated?
We are already seeing the devastating impact of climate change, with extreme weather events becoming all too commonplace in recent years and wreaking destruction around the globe. What is more, a shocking new report from the UN’s Intergovernmental Panel on Climate Change (IPCC) in August, found that ‘it is more likely than not’ that the ‘tipping point’ of 1.5 degrees Celsius above pre-industrial temperatures will be reached within the next 20 years.
What will it aim to achieve?
Four main goals have been set out, as follows:
- Secure global net zero by mid-century and keep 1.5 degrees within reach
Countries have been asked to put forward ambitious 2030 emissions reduction targets.
- Adapt to protect communities and natural habitats
Countries need to work together to protect and restore ecosystems and to prevent further habitat loss in the years ahead.
- Mobilise finance
The achievement of these goals depends on the mobilisation of trillions in private and public sector finance.
- Work together
Nothing can be achieved if countries don’t commit to working together.
The role of the investment industry
The investment industry has declared its commitment to supporting the global climate transition through the Net Zero Asset Managers Initiative. Launched in December 2020, the initiative now has over 120 signatories managing $43trn of assets. All are in alignment with the global goal to achieve net zero by 2050 or sooner and are committed to supporting investment in line with emissions targets. COP26 presents a perfect opportunity for investors to consider how they can contribute to developing innovative solutions to climate change and helping to finance the sector’s transition.
Stephanie Pfeifer, CEO of the Institutional Investors Group on Climate Change, stated that the initiative had been hugely popular. “In just six months,” she said, “nearly half of the global asset management sector has committed to achieving net zero emissions with their clients across the funds they manage. This marks a fundamental tipping point across the investment sector and a significant boost in efforts to tackle climate change and decarbonise the global economy. There’s a lot more to achieve, but the sector is increasingly on a path to a net-zero future.”