From declarations of intent to concrete measures
In 2022, it became clear that there is still much potential for the fabric of today’s global economy to be woven tighter together. COP 27 must strike the right balance between optimism and realism in order to restore the notion of solidarity among nations. To this end, social factors and the topic of biodiversity will be featured more prominently on the agenda. The only way to regain the momentum that was lost in 2022 is through a more coherent and cooperative approach when it comes to people, planet, and climate.
What are the main themes of the conference likely to be? Let's start with the elephant in the room: How will current economic and geopolitical events affect our path to the 1.5-degree reduction target? There is a real risk that the short-term political mandate to ensure affordable energy supplies will slow the transition to cleaner energy sources and the phasing out of coal.
On the other hand, new opportunities are arising; weaknesses in our current energy mix are coming to light, forcing us to rethink our energy supply more urgently, and twice as many companies joined the Science Based Targets Initiative (SBTI) this year compared to 2021. The significant progress we are seeing in renewable energy in China, Europe, India and the USA is also cause for optimism. The Science Day and Solutions Day that form part of the COP 27 agenda will cover the full spectrum of climate risks and opportunities.
First Act: Finance Day
COP 27 will begin with Finance Day, with the Glasgow Financial Alliance for Net Zero (GFANZ) initiative in the spotlight. This initiative was launched prior to last year's event to address some of the challenges facing the financial sector. It’s a collaborative approach, which looks at financed emissions, progress on the phasing out of coal financing, as well as regional policies and priorities. In June, GFANZ published draft guidelines for comment, on the topic of net-zero transition planning for financial institutions. However, this remains a voluntary initiative; formal regulatory steps and policy guidance will likely be necessary, as well as closer alignment with public financing measures.
Remaining on the topic of finance: During COP 27, two key topics will be in focus: The $100 billion climate financing plan, and Just Transition, which looks at the social aspects of transitioning to a more climate-friendly economic system. It’s clear from the latest report that the world was still behind schedule in 2020. What’s more, any mobilization of capital is concentrated in middle-income countries with lower risk profiles.
Denmark is a positive counterexample; the significant increase in the country's direct and indirect commitments illustrates the key role of public-private initiatives in the transition to a more climate-friendly system. Perhaps, however, the conference will address not only the $100 billion issue, but also the International Monetary Fund's (IMF) recent climate note and the question of how to ensure funds are effectively channelled to low-income and higher-risk states.
Focus on biodiversity
Sustainable Minute with Matt Christensen - October 2022
List of Public Events at COP 27
November 9, 14.30 - 16.00 CET
Ministerio Transición Ecológica y Reto Demográfico (YouTube)
** As of June 30, 2023.
*** As reported – not adjusted to reflect the application of IFRS 9 and IFRS 17.