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Summary of COP26: Week Two

COP26 – Success or Disappointment?

Your roundup of the key developments from Week 2 of the COP26 climate conference in Glasgow

With the conclusion of the two-week COP26 Conference, we provide you with highlights from the second and final week of the vital Glasgow United Nations climate change conference.

The rollercoaster that was COP26 may be over, but the jury is out over whether it was a success or a disappointment.

After the Glasgow COP26 went into extra time, in a bid to agree more initiatives to limit climate change rises to the 1.5C-degree target, several versions of the draft statement were produced, before a final agreement was reached late on Saturday 13 November.

A landmark agreement

Nearly 200 countries backed the Glasgow Climate Pact to keep 1.5C alive and finalise the outstanding elements of the Paris Agreement.

But China and India have been criticized by campaigners for pressing for watered-down language stating that coal should be “phased down” rather than “phased out”. However, on the plus side, this is the first time that fossil fuels have been mentioned in such an agreement.

COP26 President Alok Sharma called the agreement “historic”. Even weeks ago, nobody would have believed coal would be mentioned in the climate agreement, but that is what the Glasgow Climate Pact achieved.

But Nobel Peace Prize Laureate Malala Yousafzai says, “It was my expectation that the leaders would do something, but unfortunately they have not met the expectations of me and other climate activists. I think leaders must prioritise people and the planet over profits in this moment.”

Smoke signals

Greenpeace International Executive Director Jennifer Morgan says the inclusion of coal is a win for the climate. “It’s meek, it’s weak and the 1.5C goal is only just alive, but a signal has been sent that the era of coal is ending. And that matters.”

UK host, Prime Minister Boris Johnson, admitted the final agreement was “tinged with disappointment”, but concluded on a positive note, “We’ve kept alive the hope of restricting the growth in temperatures to 1.5 degrees, and we’ve made huge progress on coal, cars, cash and trees.”

But COP26 is not the end of the matter. The argument, pledges and agreements will continue to try to limit the effects of global warming. Some scientists already believe it is too late for humans to avert disaster.

Others are hopeful that COP26 may prove a turning point. UN chief Antonio Guterres says, “As Secretary-General of the UN, I have many battles, but the fight against the climate crisis is the most important battle of my life. It is a battle we can and must win. We cannot give up. I will not give up.”

And Environmental campaigner, Greta Thunberg, agrees the work must go on. “COP26 is over. Here’s a brief summary: Blah, blah, blah. But the real work continues outside these halls. And we will never give up, ever.”

Key developments


US and China cooperating on climate change

In a surprise move, the United States and China announced they would work together to tackle climate change over the next decade. The two are committed to “work together and with other Parties to strengthen implementation of the Paris Agreement” – and will pursue efforts to limit the global average temperature increase to 1.5 degrees C, it was announced at COP26. US and China agreed to cooperate on a range of issues, including clean energy, decarbonisation and methane emissions. UK Prime Minister, Boris Johnson, says the move provided a boost for the conference. “I welcome the strong show of commitment from China and the U.S. last night to step up climate action this decade and keep 1.5C in reach.” China and the United States are the world’s biggest polluters. Greenpeace International Executive Director Jennifer Morgan welcomes the declaration but says more needs to be done. “Ultimately their statement falls short of the call by the climate-vulnerable countries demanding that nations come back to the table every year with greater ambition until the 1.5C gap is closed.”


World ‘nowhere near avoiding climate catastrophe’, says Obama

Former US President Barrack Obama, speaking on Adaptation and Loss and Damage Day, says that the world is “nowhere near where we need to be” to avoid a future climate catastrophe. And he called on young protestors to “stay angry” and “stay frustrated.” “But channel that anger. Harness that frustration. Keep pushing harder and harder for more and more. Because that’s what’s required to meet that challenge. Gird yourself for a marathon, not a sprint.” Mr Obama hit out at China and Russia’s leaders for taking part remotely rather than in person and showing a “dangerous lack of urgency”. But he ended on a note of optimism. Fighting climate change might be hard and messy, but “The thing we have going for us is that humanity has done hard things before. I believe we can do hard things again.”


Big banks ‘still financing fossil fuel production’

The world’s 60 biggest banks have provided more than US$3.8trillion in supporting fossil fuel production over the last five years, claims a new report. JP Morgan has provided the highest amount for coal, oil and gas businesses at $317 billion, according to the Banking on Climate Chaos report. Total bank finance provided in 2020 was higher than in 2016 or 2017. On Day 9 of the COP26, Extinction Rebellion Scotland activists conducted a 24-hour vigil outside JP Morgan Chase. The 13 US and Canadian banks included have provided almost half of global fossil fuel financing over the last five years. UK bank Barclays topped European bank financing of fossil fuel companies. Campaigners say the fossil fuel industry has the largest delegation at COP26, with more than 500 delegates having affiliations to oil, gas or coal firms. Key for these organizations in playing a pivotal role to address the climate crisis is finding ways the energy transition can be managed sustainably, justly and at a suitable pace.


Fossil fuel industry subsidies must end, says UN chief

United Nations head, António Guterres, says subsidies to the fossil fuel industry worth trillions must end. The UN Secretary-General spoke on the final day of COP26, just as he did at its opening. COP26 climate pledges have been encouraging but are “far from enough.” “The emissions gap remains a devastating threat. The finance and adaptation gap represents a glaring injustice for the developing world. We need even more ambition in future revised Nationally Determined Contributions,” he told the Climate Conference in Glasgow. “Promises ring hollow when the fossil fuels industry still receives trillions in subsidies, as measured by the IMF. Or when countries are still building coal plants or when carbon is still without a price.” He adds, “Every country, every city, every company, every financial institution must radically, credibly and verifiably reduce their emissions and decarbonize their portfolios starting now.” Mr Guterres says the mobilization of civil society, the pressure from young people, the dynamism of indigenous communities and women´s groups have all inspired him.

Important steps have already been taken at COP26, including:

  • The commitment of a number of countries to work collectively to halt and reverse forest loss and land degradation by 2030.
  • More than 1,000 cities around the world have committed to reach net zero by 2050 or earlier.
  • The Net-Zero Asset Owners Alliance, which manages $10 trillion in assets, is catalyzing change across industries.
  • The G20 — including the three largest public financiers – have committed to ending overseas coal finance.
  • And 44 countries and 32 companies and regions have committed to transition from coal to clean power.

Mr Guterres concludes, “We have a critical mass of global commitments to net-zero, from both governments and non-state actors. We need to hold each other accountable — governments, non-state actors and civil society. Only together can we keep 1.5 degrees within reach and the equitable and resilient world we need.”

Scotland aims to become ‘leading hydrogen nation’

Scotland has launched a £100 million fund to help finance its 5-GW hydrogen policy, which could meet 15% of the country’s energy needs by 2030 and help it become a “leading hydrogen nation.” The fund will support renewable hydrogen projects to help Scotland reach 5 GW of installed renewable and low-carbon hydrogen by 2030 and 25 GW by 2045. Michael Matheson, Scottish Cabinet Secretary for Net Zero, Energy and Transport, says, “It is our ambition for Scotland to become a leading hydrogen nation.”

Push to end oil and gas production

Nine countries and provinces have joined a group to end oil and gas production. The Beyond Oil and Gas Alliance (BOGA) was founded earlier this year by Costa Rica and Denmark for those committed to phasing out the production of oil and gas. At COP26, it was announced that they have been joined by France, Greenland, Ireland, Quebec, Sweden and Wales, with California and New Zealand joining as associate members. Talks are going ahead for more to join. Rebecca Newsom, Head of Politics at Greenpeace UK, says, “For this initiative to be effective, many more countries need to join and make firm commitments in their national policies to rule out all new fossil fuel projects and permits immediately.”


Women ‘not the polluters of the world’

Women are not the main polluters, but they are disproportionately affected by climate change, COP26 has been told. The issue was highlighted on Gender Day. “Women and girls are also leading efforts to tackle climate change in communities around the world,” says COP26 chairman Alok Sharma. According to the United Nations, 80% of people displaced by climate change are women and children. The topic had created new momentum from around the world to put gender at the forefront of climate action. Initiatives include:

  • Bolivia committing to promote the leadership of women and girls, especially indigenous, Afro-Bolivian, community and rural women, through their involvement in sustainable development projects and to reflect gender data in its Nationally Determined Contributions
  • Canada to ensure that 80% of its $5.3 billion climate investments over the next five years target gender equality outcomes.
  • Ecuador committing to strengthen leadership, negotiation, and decision-making capacities within women’s organisations working on climate.
  • Germany announcing a new Gender Strategy under its International Climate Initiative, which will promote gender-transformative approaches in international climate and biodiversity cooperation.
  • Nigeria expanding on its Implementation Strategy for the National Gender and Climate Action Plan.
  • Sweden announcing new measures to firmly embed gender equality within all their climate action
  • The UK set out how £165 million in funding will address the dual challenges of gender inequality and climate change.
  • The USA promoting gender equity and equality in responding to climate change as a priority of its National Strategy on Gender Equity and Equality; investing at least $14 million of the Gender Equity and Equality Action Fund toward gender-responsive climate programming; and investing more than $20 million towards initiatives to increase women’s economic opportunities in the clean energy sector, strengthen action on gender-based violence and the environment, address barriers to women’s land rights, and support women farmers in East Africa to adapt to climate impacts.


COP’s ‘credibility gap’

COP has a ‘credibility gap’, with global warming set to rise by at least 2.4degrees C, far more than the 1.8-degree estimate touted at the Glasgow conference. The Climate Action Tracker (CAT) gave the warning in its annual global update at the COP26 climate talks on Day 9. The ‘good news’ of the potential impact of new net-zero targets was bringing false hope to the reality of the warming resulting from government inaction. As well as 2030 pledges, longer targets were needed or the global temperature increase will be at 2.4°C in 2100, CAT predicted. Looking at the projected warming from current policies (not proposals) – what countries are actually doing – is even higher, at 2.7 ̊C with only a 0.2 ̊C improvement over the last year and nearly one degree above the net-zero announcements governments have made.

While the projected warming from all net-zero announcements, if fully implemented is down to 1.8 ̊C by 2100, this estimate is far from certain, given the quality of the net zero goals and the massive ambition and action gap in 2030. Bill Hare, CEO of Climate Analytics, a CAT partner organisation, says, “The vast majority of 2030 actions and targets are inconsistent with net-zero goals: there’s a nearly one-degree gap between government current policies and their net-zero goals. It’s all very well for leaders to claim they have a net-zero target, but if they have no plans as to how to get there, and their 2030 targets are as low as so many of them are, then frankly, these net-zero targets are just lip service to real climate action. Glasgow has a serious credibility gap.”

Third warmest October recorded in 2021

To illustrate the need for prompt action on climate change, the EU’s Earth observation programme Copernicus published data during COP26 that pointed to the third-warmest October on record. Average temperatures were 0.42C higher than from 1991-2000. Northern Canada, northern Russia and eastern Antarctica all had much warmer months than usual.

Adaption Fund gets funding boost

The decade-old Adaption Fund, which finances projects and programmes that help vulnerable communities in developing countries adapt to climate change, has received a record $232million in commitments. Helping the most vulnerable countries and communities is an increasing challenge and imperative for the international community, especially because climate adaptation requires significant resources beyond what is already needed to achieve international development objectives. The fund is financed by government and private donors.

Aviation emission pledges soar

Nations accounting for more than 40% of global aviation emissions annually have declared their intention to reach net-zero by 2050. The 18 signatories of the International Aviation Climate Ambition Coalition have signed a new declaration to “ advance ambitious actions to reduce aviation CO2 emissions at a rate consistent with efforts to limit the global average temperature increase to 1.5°C.”

At the same time, a coalition of aviation firms has unveiled new measures to scale supply chains for sustainable aviation fuels. According to the Air Transport Action Group, “The industry says a mix of new technology including potentially shifting to electricity and hydrogen for some shorter services; improvements in operations and infrastructure; and a transition to sustainable aviation fuel by mid-century would provide a majority of the carbon reductions. Remaining emissions could be captured using carbon removals measures.”

Speeding towards making zero-emission vehicles the norm

A declaration to make zero-emission vehicles the new norm has been signed by 30 nations on Transport Day at COP26. The countries have agreed to work together to make zero-emission vehicles accessible, affordable and sustainable in all regions. The deal is not legally binding. Some pledges relate to 2030 or earlier, while others relate to leading markets by 2035 and others to 2040. Leading manufacturers, Ford, General Motors, and Jaguar Land Rover, promised to only sell zero-emission cars and vans by 2035, but other large companies, including Volkswagen, Toyota, Renault-Nissan and Hyundai-Kia did not. The United States and China were also not among the signatories.

  • Concern for the environment has hit a new high in the UK, according to a YouGov poll whose findings have been released during COP26. Four in 10 Britons (40%) say that the environment is one of the top three issues facing the country, behind health (48%) and the economy (43%).
  • New green shipping corridors have been launched – zero-emission maritime routes between two or more ports.
  • Under Mission Innovation, 22 governments and the European Commission have agreed four ‘missions’ to catalyse – cause or accelerate – investment in technologies to aid urban transitions, eliminate industry emissions, enable carbon dioxide removal and produce renewable fuels, chemicals, and materials.
  • Germany, Luxembourg, Austria, Portugal and Denmark have called for a nuclear-free EU taxonomy for sustainable investments. The group issued a Joint Declaration for a nuclear-free Taxonomy. (Clean Energy Wire)
  • Egypt will host COP27 in Sharm El-Sheikh from 7-18 November 2022, the country’s environment ministry has confirmed. (Reuters)


For more on ESG and the finance sector, see our November Sustainability Summary and our latest research on How Sustainable is Financial Services?

Following on from our research into sustainability in financial services, look out for our upcoming sustainability in technology report.

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