One of the main tasks of delegates at COP28, which kicked off this week in Dubai, will be to complete the first global stock-take. This will review how national governments are performing against the Paris Agreement goal of limiting global warming to 1.5°C.
The aim is to shift attention away from big global targets – which sound impressive but lack accountability – to what individual countries are doing or, as Columbia Threadneedle Investments said in a recent post, failing to do.
The need for course correction is clear: a recent UN study finds that greenhouse gas emissions must fall by 43 percent by 2030, versus 2019 levels, to stay under the 1.5°C threshold. Governments are taking ‘baby steps’ when they need to make ‘bold strides,’ says Simon Stiell, executive secretary of the United Nations Framework Convention on Climate Change, in the report.
While UN climate talks are often derided as exactly that, a lot of talking and no real follow-through, it’s hoped the stock-take will provide enough specific details about what’s working – and what isn’t – to compel more action. That, in turn, would mean further pressure on companies to accelerate their own decarbonization efforts. Issuers account for one fifth of global emissions, according to MSCI, making them crucial to speeding up progress.
Investors are closely watching the stock-take to see how it shapes national approaches to climate change. Columbia Threadneedle says a potentially useful outcome would be more detail on countries’ transition pathways.
‘While talk about new global goals such as tripling renewable energy capacity and doubling the rate of energy-efficiency improvement is worthy, such high-level targets are uninvestable without more clarity,’ it says.
The impact team at Union Bancaire Privée, meanwhile, says it hopes the stock-take will create ‘further ambition’ for national reduction targets and, in regard to private companies, progress on the ‘regulation of net-zero claims’.
In addition, existing investor campaigns are likely to get louder. Ceres, the non-profit that runs an investor network focused on sustainability issues, has released a statement calling COP28 ‘a pivotal moment to raise global ambition and action’. In particular, it says more work is needed on methane emissions, nature loss and water degradation.
IR teams are now well versed in discussions on sustainability issues. COP28 will give some clues about where that conversation will go next.