With the first week of COP26 in full swing, there is no shortage of news to cover.
Leading with hope
COP26 kicked off in Glasgow with an emotional speech from Sir David Attenborough who challenged world leaders to be “motivated by hope, not fear.” UN secretary general António Guterres followed with a warning against blind climate optimism, as he critiqued leaders for historically not doing enough to stave off climate breakdown.
Guterres’ angst is understandable given the talks at the pre-COP G20 meeting in Milan proved lackluster: with little to no new commitments. Likewise, the most recent UN Emissions Gap report shows key countries are not pulling their weight. No wonder why 18 year old Swedish climate activist Greta Thunberg led a chant of “you can shove your climate crisis up your arse!” With another week to go, we can only hope the momentum created by the words of Attenborough, Guterres, Thunberg, and other key climate advocates will produce a revolutionary response.
Modi starts with a bang
Narendra Modi, Indian prime minister, provided the most positive news of COP day 1, surprising delegates by pledging that the world’s 3rd largest emitter will be net-zero by 2070. Although this is heartening progress it’s also disappointing because it misses the 2050 target set by the Paris agreement. Other significant agreements in the inaugural week include a pledge to halt deforestation by 2030 from more than 100 nations (US President Joe Biden, China’s Xi Jinping, and Brazil’s Jair Bolsonaro are some of the signatories) and a vow from over 20 countries and financial institutions to halt all financing for fossil fuel development overseas. Additionally, Biden has pledged to curb US methane emissions by 30% by 2030.
Some journalists will judge this COP as a failure because there was no big bang moment where all the heads of states stood before the cameras to tell the world they had solved climate change. But the COP meeting was never going to produce such a moment. The 2015 Paris agreement was such a moment, but the targets set then were largely promises. Now, as each year goes by, the delegates return to COP with pressure to fulfill those promises. This is where it gets hard and the costs can be high. So, while the meeting still has a week to run, it’s clear we will not see that photo opportunity, but in my opinion, there has been great progress made. And there still is a lot of work to do.
ESG Standards Converge
While incremental progress crept forward, Wednesday brought a step-function change to (finally) converge the standards by which the world will measure success of these commitments. For many years, companies and investors have complained about the confusion and costs caused by too many ESG disclosure standards. On Wednesday, the IFRS Board (International Financial Reporting Standards) announced the formation of a new International Sustainability Standards Board (ISSB) to develop comprehensive, global, high-quality sustainability disclosure standards.
This new standards board will consolidate several of the existing ESG standards groups - specifically the Climate Disclosure Standards Board (CDSB) and the Value Reporting Foundation (VRF—which created the SASB Standards and had previously merged with the Integrated Reporting Framework). All of these mergers will be completed by June 2022. And, they even issued a draft of their new climate disclosure standard.
While news about consolidation of reporting standards may seem like boring paperwork compared to groundbreaking climate pledges, it has a monumental impact. Creating a single global common language for measuring and reporting on carbon and other ESG topic provides the essential tools needed to battle the climate crisis. Aligning the new standards with financial disclosures will help align capital with sustainable business practices. In short, this change will speed the transition to a low carbon economy.
On a personal note, this was a goal that I worked to achieve in a prior position. I want to add my congratulations to all the people who carried that work forward to this truly outstanding achievement.
What lies at the core of the discussions and commitments at COP26 is money. Or, more precisely, the money that goes from the richer, major carbon-emitting countries to the countries with fewer resources and lower carbon footprints. With the annual climate finance pledge still sitting $20 billion below its target and not likely to make it there until 2023, many countries with lower carbon footprints who are often the most at-risk for climate disaster still lack adequate funding to mitigate and adapt to climate change.
This issue was highlighted by Barbados’s Prime minister Mia Mottley’s powerful speech, which spoke for all small island nations in saying a 2.0C rise in temperature would be a “death sentence,” and that any selfishness or greed from developing will be “measured in lost lives and livelihoods.”
Meanwhile, on the sidelines during the November 3rd day of finance at the COP, there were multiple promising announcements from private-sector finance. BlackRock, the world’s largest asset manager, achieved a $673 million fundraise for the Climate Finance Partnership, which focuses on financing the global transition to net zero. Even more critical, the launch of the Glasgow Financial Alliance to Net Zero meant financial institutions with $130 trillion at their disposal vowed to reach net zero by 2050. And, to ensure there is no confusion with the meaning of net zero, the Science-Based Targets Initiatives released a report aimed at creating a consensus and the first step towards a science-based net zero standard for financial institutions.
Partisanship rains on Biden’s party
Biden’s bold plan and lofty promises at COP26, are the most significant climate commitments in US history. However, celebrations are being stifled as the political battle back in Washington DC still rages with no full agreement on his spending plan just yet. And the off-year election gains for the Republicans may also place the finish line for executing his policies that much farther away.
After a rollercoaster 5-year relationship with the Paris Agreement and the broader international climate discussion, Biden is looking to distance himself from the Trump administration’s climate denials and withdrawal from the Paris Agreement. Through his apology to the COP convening, he drew a line between his administration and his predecessors showing the world that the US is ready to take its seat at the table and lead in the fight against climate change.
As the world keeps burning, the world’s still turning...
As these talks are ongoing, the reality of the effects of climate change has never been felt more severely as further evidence is released on how the record-breaking forest fires and heatwaves are unequivocally a result of climate change. American cities imperiled with the worst warming effects of climate change are hiring chief heat officers to alleviate some of the worst effects of the oppressive heat.
These realities are especially clear and tangible in the global south, where people who contributed least to climate change suffer the worst effects. Low-lying Pacific nations such as the Marshall Islands that the World Bank recently identified as one of the first whose existence is threatened by sea-level rises are on the front line of climate change. This leans into the overarching issues faced by COP26.
As always, please comment, share, and subscribe. Here are a few other headlines that you may have missed:
Nature released two studies relating to the health implications of burning fossil fuels, one about the rapidly growing negative health effects of climate change-induced hot extremes in cities, the other focused on the consumption patterns in the G20, killing 2 million people annually through airborne particulate matter.
Microsoft got one step closer to achieving its goal of using 100% renewable energy at its buildings and data centers by 2025 by sourcing 24/7 renewable energy for its Virginia data centers. The Global Carbon Project’s latest report finds that carbon emissions are returning to pre-pandemic levels, with U.S. emissions expected to spike by 7.6% compared to 2020, but still remain below 2019 levels at 3.7%, making up 14% of global emissions.
The Wall Street Journal published a helpful article which explains how the 4 trillion dollars/year necessary to transition to a carbon-free economy isn't as expensive as it sounds. Brian Moynihan, Chief Executive of Bank of America, points out how the sums involved aren’t that large when properly scaled. Moynihan also notes that a price on carbon and carbon mandates would be immensely beneficial.
Biden administration officials at COP have recognized the importance of profitable financial investment in fighting the climate crisis. Namely, white house officials have identified how a primary goal of public climate investments must be to transform climate projects into profitable investments, shouldering the risks which corporations are unwilling to take.