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At the UN Climate Conference (COP27) in Egypt in November, delegates met to discuss the public and private sector actions needed to tackle the climate crisis. 

Some of the key takeaways from the event include the establishment of a “loss and damage” fund, to make funding available to countries that are hit hard by climate disasters. In addition, adaptation was a major focus at COP27 with eight countries committing US$105.6 million through the Least Developed Countries Fund and Special Climate Change Fund. These outcomes recognise the importance of mobilizing finance to keep the 1.5°C goal alive, but much more still needs to be done to stave off the worst effects of climate change. 

The Investor Agenda Founding Partners – AIGCC, CDP, Ceres, IGCC, IIGCC, PRI and UNEP FI – co-hosted an official COP27 side event that included asset owners and asset managers speaking about scaling up investor action to achieve net zero. Panellist Ben Meng, Executive Vice President and Chairman of Asia Pacific at Franklin Templeton, highlighted the importance of the Investor Climate Action Plans (ICAPs) Expectations Ladder and Guidance, which help investors navigate expectations and initiatives on climate change. Referring to ICAPs as “a God-send” for investors, Ben also highlighted that governance is a cross-cutting theme across all four areas of a climate plan. 

The event also discussed the Investor Agenda 2022 Global Investor Statement to Governments on the Climate Crisis, which the most ambitious yet in terms of its policy asks. The statement was signed by 602 investors managing almost $42 trillion in assets, some of whom were present at the side-event. The event closing was delivered by Eric Usher, Head of the UNEP FI. He remarked on the significance of this clear message from investors to governments, as well as the importance of policy frameworks to enable private investment to flow into climate solutions at the speed and scale needed to limit warming to 1.5ºC. Eric highlighted that there is much more to do to expand public and private sector investment in mitigation and adaptation in emerging markets and developing economies. Founding Partners of the Investor Agenda have shared their reactions and key takeaways from COP27 below. 

AIGCC 

Rebecca Mikula-Wright, CEO of AIGCC and IGCC and Investor Agenda Steering Committee member said: 

“Investors need to start accounting for physical risks of climate change through assessments to ensure resilience of their investment portfolios. Investors should step up in implementing adaptation strategies for the region through regional mechanisms like the National Adaptation Plan (NAP) process. AIGCC has developed a list of key asks from governments on the various elements of the NAP process to support the flow of private finance into adaptation and resilience projects such as the inclusion of action points on implementation of NAPs and financing options.” 

“We have not seen significant progress in country-level actions and commitments on mitigation post-COP26. This is concerning as we need to nearly halve GHG emissions by 2030 if we want to meet the 1.5°C target.  

“We need to see countries committing to more ambitious transition plans. Governments need to revisit and strengthen the 2030 targets in their national climate plans, as well as accelerate efforts to phase out or phase down the use of fossil fuels and accelerate the transition to renewable energy.” 

Read the full AIGCC reaction here. 

CDP 

Amir Sokolowski, Global Director for Climate Change and Pietro Bertazzi, Global Director for Policy Engagement and External Affairs at CDP said:  

“Outside finance for loss and damage, progress on global climate finance also failed to enhance results, though an historic attempt to redefine the structural barriers was made. Governments agreed to explore reforms to multilateral development banks and other financial institutions to help stimulate more investment in low carbon and climate-resilient infrastructure. This is a welcome recognition that the global economy needs to adapt to the climate change already baked in: we must make the financial system fit for an era of climate shocks. 

“One such transformative suggestion is The Bridgetown Initiative, proposed by Barbadian Prime Minister Mia Mottley: a foundational, innovative proposal that has the potential to deliver the resources and structures needed to overhaul the global financial system. It aims to reform multilateral development banks (MDBs) and international financial institution’s (IFIs) financial allocations so that more goes to countries struggling with debt levels made worse by climate disasters, addressing the high levels of debt while dealing with other development challenges, and measures that build resilience against climate threats.” 

Read the full CDP reaction here. 

Ceres 

Mindy Lubber, CEO and President of Ceres and Investor Agenda Steering Committee member said: 

“At COP27, the issue of helping small developing countries mitigate, adapt and recover from the devastating effects of climate change was rightfully at the top of the agenda. The poorest countries in the world did not cause the climate crisis but they are bearing the brunt of its devastation. We are pleased to see the final COP 27 cover decision includes terms for establishing a loss and damage fund to help the most vulnerable and economically disadvantaged countries.   

“We also agree with its call for reform of the priorities and processes of multilateral development banks to fit the purpose of addressing the climate emergency, align with the global goal of net zero emissions, and better facilitate private climate investment in developing countries by providing de-risking mechanisms. Private capital will follow.  Achieving our collective global climate goals necessitates that the entire globe be included in solutions and benefits and that all countries move jointly to reduce greenhouse gas emissions to levels that will bring climate stabilization.” 

Read the full Ceres reaction here. 

IIGCC 

“Though the debate over loss and damage loomed large in the media there were a huge number of other important conversations taking place, including on adaptation and resilience, the concept of just transition, and a dedicated Buildings Pavilion to discuss the real estate sector’s emissions. 

“Speaking at the World Climate Summit side-event, IIGCC CEO, Stephanie Pfeifer explained that ‘with the physical impacts of climate change already being felt around the world, many investors are now taking an active interest in how they can invest in adaptation and resilience efforts.’” 

Read the full IIGCC reaction here, or deep dive into an overview of finance day here or the IIGCC activities here. 

PRI 

“The significance of holding this COP in Egypt cannot be understated. Climate change threatens our way of life and our ways of doing business, and this cost stands to be disproportionately borne by developing nations across Africa and beyond. 

“Without action, our planet’s warming will undoubtedly compound the current and deeply challenging economic and social pressures for those nations that already have desperately scarce resources available to tackle them. 

“The discussions I heard during the week made it clear that our industry has an integral part to play in facilitating an orderly and just transition to a global economic system that safeguards the future of our world and means that investors can effectively execute their fiduciary duty and deliver returns well into the decades to come.” 

Read the full PRI reaction here. 

UNEP FI    

“After COP26 in Glasgow, when the focus was very much on ambition and commitments, this year’s summit was expected to focus on implementation. In the end, COP27 presented a mixed bag, achieving little to tackle the causes of climate change while delivering some positive developments on reducing the impacts. 

“In the wake of COP27, the Net-Zero Asset Owner Alliance (convened by UNEP FI and the Principles for Responsible Investment), called on national governments to raise their ambition until they are aligned with a low or no-overshoot 1.5C pathway, including explicit and meaningful short-term commitments to phase down fossil fuels and ultimately phase them out.” 

Read the full UNEP FI reaction here. 

So, where do we go from here? In December, all eyes will be on nature and biodiversity with the UN Biodiversity Conference (COP 15) taking place in Montreal. At COP15, two of the Investor Agenda Founding Partners – Ceres and IIGCC, along with a group of investors – will be announcing a new global investor initiative, known as Nature Action 100, to drive corporate action on nature and biodiversity loss.  

Watch this space for further global and regional climate policy takeaways from 2022.