In anticipation of COP26, a number of industry experts discuss their expectations and potential hurdles to meaningful progress.
No solution without sacrifice
“I’m sad to say I have quite low expectations for COP26, as I think there is not yet a strong enough commitment by the international community to solve the climate challenge. The ‘not in my backyard’ logic that translates into ‘I want to solve but without sacrifice’, is still too persuasive and data are often used to point out the faults of others while forgetting the harsh truth of cumulative or per capita emissions.
“Data can give different information depending on how it is looked at. COP26 will probably be an intermediate step in the fight against climate change. It won’t be the definitive one, but a necessary step that can hopefully create the more homogeneous cultural background needed to lay the groundwork for bolder action in the future.”
Stefano Montobbio, head of ESG and governance, EFG Asset Management
Crucial discussions don’t even make the agenda
“COP26 is one in a series of vital steps in creating a globally shared sense of the issues facing the planet. It’s also a real opportunity to address some of the underlying drivers still regarded as too sensitive to talk about head on.
“At the top of that list lies population growth. The global population has exploded fourfold in the 20th and early 21st century, a growth driven by our economic paradigm and enabled by industrialisation, by wholesale food production, increased longevity and improved medical care. The global governmental response is focused on reducing the ecological footprint of 7.9billion people, while watching that number increase by around 250,000 per day.
“Yes, we need to dramatically reduce the harm we are doing as a global population, and we need to do it right now; but no matter how efficient we get there will always be a natural cap to the number of people the planet can sustain. That discussion is sensitive, politically fraught, and not even on the agenda.
“Instilling the concept of a shared responsibility is the key goal for COP26. Nations, particularly some that should know better such as the US, have too long been allowed to foster domestic interests while directly adding to a common crisis. The situation needs leaders, not shirkers. But is Boris up to the task?”
Mark Northway, investment manager, Sparrows Capital
The UK’s chance to be a true leader
“The UK already has one of the most ambitious targets to reduce emissions by 78% (compared to 1990 levels) by 2035, and be net zero by 2050. However, approximately 30% of the global economy still does not have a commitment to reaching net zero emissions. This represents the greatest obstacle arguably: to achieve both global collaboration and co-ordination and to obtain firm commitments from some of the worst global polluters. That must be achieved for COP26 to be truly deemed a success.
“This raises another key aspect, not just focusing on the end target but how we are going to get there. Innovation and the adoption of new technologies must play a vital role, as must developed nations in encouraging and supporting poorer countries in their transition towards more climate-friendly practices. Tackling climate change could be a shot in the arm for the economy and the UK can set an example, use its influence and become a true leader in the field. Personally, I hope we grab that opportunity with both hands.”
Neill Blanks, research director, MainStreet Partners
We need more than a few financial grants
“It is important for investors and the investment industry to witness words being turned to action at events like COP26, which should be aiming to harness the desire for long-term profitable investments that also facilitate a greener future.
“Investors will want to understand how elected officials will utilise the market imperative for profitable growth by bringing forward demand for otherwise expensive technologies and fuelling innovation as profits are recycled into further growth. Bridging the gap ultimately requires a co-ordinated strategy for progressively levelling the cost of green technologies with fossil fuels. This also requires the ability to do so on a global basis to assist those countries less able to eliminate the economic imperative for cheaper fossil fuels.
“Within the UK, creating a world-leading industry will need more than a few time-limited grants. Sustained support that can comfortably allow innovation leaders to reach economic scale on a level playing field will do much more to accelerate investment.”
Philip Rodrigs, founder and portfolio manager, Raynar Portfolio Management