COP26 wrap up thoughts on the "least worse" outcome
Updated: Aug 23, 2022
Thoughts from David Woods
David Woods has been expertly assessing the implications of COP26 for New Zealand and shared updates on the Centre for Sustainable Finance, summarising, "Whatever decisions we make [in New Zealand], the investments needed are eye-watering - in enhancing electricity production, in transport, infrastructure, and agriculture to name a few". Read more.
There were also developments in measurement and impact with the International Financial Reporting Standards announcing the setting up of the Sustainability Standards Board. The International Finance Corporation’s Stephanie van Friedberg predicting that “ESG is now table stakes - as we start reporting on impact, that’s significantly harder”. Read more.
Climate Change Minister James Shaw
So what came out of the COP26, the UN Climate Change conference? A deal is done but disappointment is the lingering feeling for many. The agreement was described by Climate Change Minister James Shaw as the "least worst" outcome.
Indigenous leadership to climate change response
Aotearoa New Zealand contributed to an inspired kick off to COP26 with India Logan-Riley outlining the importance of indigenous leadership to our climate change response. "Finance must be redistributed towards loss and damage and a just transition. Land back, oceans back, this is all part of following indigenous leadership. This is what keeping warming below 1.5 looks like".
There was so much material coming out of COP26 and useful to have KPMG's media insights to filter climate change subtopics such as mobilisation of capital.
Private sector commits $130 trillion to net zero transition
Financial institutions made vital commitments, in particular the Glasgow Financial Alliance for Net Zero (GFANZ), bringing together more than 450 institutions, representing $130 trillion of financial assets (40 percent of the global total). The GFANZ promised to align their portfolios with net-zero goals. To put this in context, McKinsey estimates a net-zero transition would require at least $150 trillion of capital spending, two-thirds of it in developing economies. Read more.
GSG - importance of impact investing
Cliff Prior from the Global Steering Group for Impact Investment (GSG) highlighted the importance of the global impact investing market, which has reached about $US1 trillion however nowhere near the $US90 trillion needed to achieve the UN Sustainable Development Goals by 2030. “Impact investing is absolutely crucial right now. We must be clear here, there are many challenges to achieve [including] net zero, social and climate imperatives. But if you haven't got a finance system that is positively designed to achieve social and climate goals, you haven't got a chance.” Read more.
Rod Oram - progress made despite "inadequate" agreement
Rod Oram thinks that progress was made despite an "inadequate" agreement. Critically, the agreement needs to be turned into action with Shaw concluding, “Now COP26 has come to a close, attention needs to turn to the action countries must take to decarbonise their economies. For years we have been discussing the detailed rules that sit under the Paris Agreement. With much of that now finalised, countries can get on with the crucial work of implementation". Read more.