With just over 100 days to go until the UN climate summit, we kick off our running blog with a COP26 recap and a look at what’s next.
The United Nations’ climate conference COP27 is set to take place in Egypt this November. Lisa Sizeland in Schroders’ global content team has summarised what COP27 is and why it matters in this Q&A.
July 26: just over 100 days to go until COP27
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With just over 100 days to go until COP27, we are initiating this live blog to share the latest news and perspectives on the climate crisis around the world.
The annual Conference of the Parties is one of the world’s most important international events. It sees representatives from governments and other organisations gather to report on their country’s progress against the goals set out in the Paris Agreement and make new decisions on to how to reduce carbon emissions.
At the 2015 conference, countries were asked to make changes to keep global warming “well below” 2°C above pre-industrial levels – and to try to aim for 1.5°C.
Over the last few weeks of November 2021, all eyes were on Glasgow as global leaders, businesses and charities gathered for COP26, which was hosted by the UK.
As Simon Webber, a lead portfolio manager at Schroders who has invested in climate change trends for more than 15 years, said at the time: “Some conferences can be a formality, but COP26 is arguably the most important climate conference in a decade.”
Topics covered were wide-ranging. From developments in natural capital and carbon markets and the creation of the Natural Capital Investment Alliance to accelerate natural capital as a mainstream investment theme, to the phasing down of coal and commitments to end harmful deforestation.
We’ll be bringing you the latest climate news in the run-up to negotiations in Sharm El Sheikh.
In a nutshell: COP26 recap
- COP26 was the fifth since Paris in 2015, which saw nearly 200 countries signing up to the Paris Agreement, the framework to avoid dangerous climate change by limiting global warming to well below 2°C and pursuing efforts to limit it to 1.5°C.
- Sir David Attenborough, the broadcaster and natural historian, kickstarted the event with a speech urging world leaders to turn “tragedy into triumph” as “People’s Advocate for COP26”.
- By the end of the conference, a new global commitment – the Glasgow Pact – was agreed.
- For the first time, an explicit plan to reduce use of coal, which is responsible for more than a third of emissions, was agreed.
- 100 individual country leaders came together, as well as a lot of companies, including Schroders, committing to ending deforestation – certainly commodity-based deforestation, which is deforestation related to farming primarily – by 2030.
- China and the US, the world’s biggest emitters, agreed to boost climate co-operation over the next decade.
- A request to double the amount of spending to around $40 billion annually to support developing countries was met. In particular to help enable them to mitigate or reduce the impacts of physical climate change – rising sea levels, increased weather damage – on their economies.
- A scheme to cut 30% of methane emissions by 2030 was agreed by more than 100 countries.
In a nutshell: COP27 and what’s next
- COP27 is set to take place from 6-18 November and will be the 27th COP since the first (COP1) in Berlin, Germany, in 1995.
- A detailed agenda has not yet been released, but you can read about the Egypt Goals and Vision on the Egypt Presidency website.
- After COP26, countries were asked to come back by this year’s conference to strengthen their 2030 commitments.
- Mahmoud Mohieldin, the UN climate change high-level champion for Egypt, has said the summit must focus on adapting to loss and damage from climate change.
- A commitment from 2009’s Copenhagen conference that developed countries would provide significant finance to support countries in the emerging world has still not fully materialised. A $100billion a year target has not been met.
- The “double counting” problem in carbon markets – whereby a country that’s creating an offset, for example through forestry, would count the benefit while the country buying the offset would also count the benefit – has still not been solved.
- There is still no global carbon price.
- The latest updates from the UN’s Intergovernmental Panel on Climate Change have been stark warnings on the impacts of climate change on people and the planet that are already materialising:
1: “An atlas of human suffering”: IPCC climate change update (released 28 February 2022)
2: Now or never for climate change mitigation, IPCC warns (released 4 April 2022)
A synthesis report is scheduled to be released in late 2022 or early 2023.
More from COP26:
“A quiet revolution in environmental investment is underway. It will make a difference.” – Peter Harrison, Group Chief Executive
“COP26 wasn’t all about governments: on the private sector side we saw the formation of the Glasgow Financial Alliance for Net Zero (GFANZ) chaired by Mark Carney and Michael Bloomberg. This comprises $130 trillion of assets which are committed to net zero goals.” – Simon Webber, Lead Portfolio Manager
“There were a number of individual areas – for example around deforestation and around carbon markets – which moved forward. But in some ways the headline ambition of COP, which was really to ratchet up the levels of ambition of individual countries, has been somewhat deferred through to next year and next year’s COP in Egypt.” – Andy Howard, Global Head of Sustainable Investment
Dame Elizabeth Corley, also chair of the Impact Investing Institute, set out Schroders’ commitment to investing in natural capital as part of an influential speaking slot at the COP26 Leaders event: Action on Forest and Land-use on 2 November 2021.
“It’s our ambition to scale this. It’s also to catalyse change, to improve the way we can finance projects, start early-stage innovation and to help others in a way that means we are doing absolutely the right thing for people and the planet and to also deliver a financial return for everyone who saves money with us.”
“The just transition is both a goal and a requirement: global agreement across policymakers representing every part of the global economy will not be possible unless all consider the plan fair.” – Andy Howard, Global Head of Sustainable Investment
“A dollar invested in emerging and frontier markets can do more for the climate emergency than one invested in developed markets, but we must ensure plans are fair to all.” – Maria Teresa Zappia, Head of Sustainability and Impact at Schroders Capital
“The good news is that we are concerned enough for Greta Thunberg to be immediately recognisable around the world. The bad news is that we are not scared enough. Despite all the policy action in the last decades, greenhouse gas emissions are still increasing and the planet is still warming.” – Anastasia Petraki, Investment Director, Sustainability
“A powerful way to incentivise businesses to decarbonise would be an agreed carbon price. This would charge emitters based on the amount released into the atmosphere, aiming to put the cost back to the source. Many countries already have some form of carbon pricing, but in order to be effective we would need universal adoption.” – Kate Rogers, Head of Sustainability, Wealth