Dalelorenzo's GDI Blog
15Jun/210

Countdown to COP26: How 2021 is a ‘make or break’ year in the fight against climate change

Countdown to COP26: How 2021 is a 'make or break' year in the fight against climate change

The latest UN report has put the world on red alert, but future directions of walk is clear - Schroders' CEO and experts give their view on the role of investors in the energy transition

This year will be "make or break" in the fight against climate change, the UN Secretary-General Antonio Guterres has warned.

The next United Nation environment meridian, COP2 6 - or to give it its full designation, the 26 th Climate conference of the Parties - is due to take place in Glasgow in November.

Postponed from last year due to Covid-1 9 restraints, it is being co-hosted by the UK and Italy, and countries are expected to announce new climate targets in advance.

The narrative

More than 190 countries have signed the Paris climate accord, which aims to limit temperature rises to well below two grades Celsius, and ideally to 1.5 stages Celsius, compared with pre-industrial levels.

However, provide comments on an interim report from UN Climate Change published on 26 February, the Secretary General described it as a maroon notify for countries around the world. To restraint global temperature had risen to 1.5 severities Celsius, we must chipped carbon emissions by 2030 by 45 per cent comparison with 2010 levels, according to the Intergovernmental Panel on Climate Change( IPCC ).

But the report revealed that while a majority of the members of societies represented had increased their height of aim over emissions targets, their blended jolts descended far short. UN Climate Change said they were on "a path to achieve merely a one per cent reduction by 2030 comparison with 2010 levels".

The initial "nationally determined contributions" synthesis report summarises the impact of 48 brand-new and revised. These NDCs are national climate programs including emissions parts targets for 2030.

What's the responses been?

As the final form will not be published until later this year, this is a snapshot. Nonetheless Patricia Espinosa, Executive Secretary of UN Climate Change has said that it establishes current levels of climate ambition are "very far from putting us on a pathway that will meet our Paris Agreement goals". She added that "decisions to accelerate and broaden climate action everywhere must be taken now".

COP2 6 President Alok Sharma has said the report should "serve as a call to action" and has asked all countries for ambitious 2030 targets. "We must recognise that the window for action to safeguard our planet is closing fast, " he warned.

Who else has been talking about COP2 6 and the fight against climate change?

As vaccinations have encouraged hope for an end to lockdowns, and even the pandemic itself, climate change is gaining friction again.

Government representatives, climate partisans, business anatomies, and media celebrities are queuing up to stress the urgency of the situation. Malala Yousafzai, the Nobel laureate and education campaigner, naturalist Sir David Attenborough, Tesla founder Elon Musk, and notorieties including actress Emma Thompson, Arnold Schwarzenneger, Leonardo DiCaprio and Pharrell Williams.

US president Joe Biden nursed his own leaders' summit on climate change on April 22 after he rapidly re-signed the Paris accord on participating the White House.

Bill Gates has published a high-profile book on the subject and said recently: "Avoiding a climate disaster requires a different way of doing business, the daring to take on probabilities that many Ceos are not used to making - and that investors are not used to rewarding."

In January, Schroders wrote to the UK's largest fellowships asking them to publish detailed and fully costed change designs on climate change impacts. Schroders' chief executive reminds "climate change is creating a 1929 moment".

In December 2020, Schroders affiliated 29 other world asset administrators representing more than$ 9tr of assets in launching the Net Zero Asset Managers initiative. This leading group of asset managers commits to supporting the goal of net zero greenhouse gas emissions by 2050 or sooner, in line with global efforts to limit warming to 1.5 degC.

Schroders is also actively engaged with Climate Action 100+, an investor initiative to ensure the world's largest corporate greenhouse gas emitters take necessary action on climate change.

Schroders' chief executive was of the view that just as the 1929 Wall St crash led to a complete repair of firm clarity, companies should be under as much pressure now to deliver clear plans to tackle climate change.

Peter Harrison - Schroders' CEO:

"Initially, we have contacted companies in the FTSE 350 index. We have offered foundation in the execution of their plans but also made it clear that we will monitor progress closely. Looking onward, we will expect the same progress beyond these shorings. We would like to see all medium and enormous firms, regardless of where they are listed, publish their plans."

What do our specialists say? Mark Lacey - Schroders' head of world source equities:

"The high-profile intervention of Microsoft founder Bill Gates in the climate change debate should be welcomed. He captivates the challenge of the century: how do we stop lending 51 billion tons of greenhouse gases to the atmosphere every year. This needs to be done as fast as possible to avoid climate disaster and in an economic and balanced road. The world-wide intensity method, when you mix energy, transportation and heating/ cooling, is effectively responsible for half of the 51 billion tons of greenhouse gases being released into the atmosphere. This change in the vitality organisation to a more sustainable system is what people now can be attributed to as the 'energy transition'.

"As investors in this trend, we are responsible for investing our clients' money responsibly in the companies directly involved in the structural alteration of the world exertion arrangement over the next 30 years."

Lesley-Ann Morgan - head of multi-asset policy:

"As regulators and policymakers act to prevent a climate catastrophe, the implications for businesses and investments are real. It intends an growth in the way we generate and consume energy, the likes of which we've not realise for generations.

"Political will to take action continues to gain momentum, which entails corporations and investors will need to be active if they and their financings are to remain fit for purpose. To even begin to think about cros the daring net zero targets, fellowships need to fix quantifiable decarbonisation projects themselves.

"This highlights the importance of investing actively. And the importance of actively understanding what fellowships are doing to improve and deeming them to account if they don't.

"By looking for those companies that will contour a cleaner future, investors can benefit from the transition to a zero carbon world-wide. This will be one of the most disruptive challenges and opportunities that companies have to deal with in the next few years and decades."

Andy Howard - Global Head of Sustainable Investment:

"It's very clear that many companies , not only in the ponderous manufactures but across the board, are already working on or have carbonisation plans. It's very clearly altered from climate change being a sort of distance risk topic within boardrooms to one that's much more securely on the agenda."

Schroders is a partner of the Net Zero Festival. Click here to read more Sustainability revelations from Schroders

Read more: businessgreen.com

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