COP28 – Expectations and Actions
“I urge the world to carefully study the global stocktake synthesis report. It is a report card of our collective climate action. And not a good one. COP28 is our chance to make a dramatic course correction.”
-Simon Steill, UN Climate Change Executive Secretary
We are all aware of the risks that climate change pose to global communities as well as investors - we highlighted a number of these risks in our climate blog series over the summer. And so where do we go from here? The latest UN Conference of the Parties to the Convention, COP28, is fast approaching and, within this blog, we provide some insights into what might be expected.
The upcoming UN climate summit COP28 will be held in the United Arab Emirates later this month. The location is controversial given that roughly 6% of the world’s oil reserves are controlled by the UAE government[i], as well as the appointed COP president being Abu Dhabi National Oil Company CEO Sultan Al Jaber. This poses an interesting dynamic and industry reactions have been mixed thus far.
The annual COP provides an opportunity for member countries to determine climate ambition, responsibilities, and action. This COP is unique in that the first Global Stocktake, whereby progress towards the Paris Agreement commitments will be measured, is due to conclude at the event.
What will this mean for investors?
Whilst we don’t know where conversations will land at COP28, investors should engage with resulting conclusions and actions. This hopefully means an increasing focus on social and nature issues rather than seeking climate opportunities purely via a ‘low carbon’ lens.
What can investors do?
- Understand the outcomes of COP – investors need to make effort to understand the result of the Global Stocktake and COP more generally, to prepare for likely climate outcomes. The investment industry is watching the outcomes closely and there will be a lot of material produced to help investors.
- Engage with carbon and nature – following an expected increase in attention on the link between climate and nature, investors are likely to need to engage with their exposures to understand their current impact and explore opportunities (perhaps in nature based solutions and carbon capture technology). We hope to see continued innovation in products available to investors.
- Engage with social aspects – in alignment with the focus on people, investors can evaluate their stance on social factors and pursue a greater integration of social considerations. We hope there will be further developments in socially focussed investments in the near term, likely across private and real assets, and we will monitor market developments closely. Our blog on the climate refugee crisis aligns with anticipated discussions around focussing on people, lives and livelihoods. The conversation around the disproportionate impacts of climate change and the need to support those most vulnerable should be brought to the fore in the COP discussions.
- Integrate with a holistic approach – following these engagements, we believe that a joint consideration of E, S and G factors across the investment objective and approach of investors is crucial to ensuring that risks are managed appropriately, given that there are often trade-offs and secondary effects.
Please get in touch if you would like a further discussion on any of the issues raised in our summer climate blog series, or our thoughts on COP28.
This follows a set of climate blogs, touching on the emerging issues in tackling the climate emergency, please see below for these resources.
Get in touch
Head of Sustainable Investment
Sustainable Investment Consultant
Isio Published Blogs
- The rising frequency and severity of extreme weather events: Climate Chaos: It's getting physical (isio.com)
- Temperature rise resulting in climate refugees: The climate emergency has created a “climate refugee” crisis (isio.com)
- The role of different stakeholders in tackling the climate crisis: Stirring the Climate Emergency Pot: A Recipe for Stakeholder Action? - Page 3 (isio.com)
- The effectiveness of investor engagement versus divestment: Have stewardship or divestment been entirely effective to date? (isio.com)
- The role of oceans in climate resilience: Leveraging the Blue Economy to tackle the climate crisis and beyond (isio.com)