We need only take a cursory check of global weather in recent months to remind ourselves of the consequences of climate change.
Over the summer, record temperatures in parts of the US, in southern Europe and in China affected the lives of an estimated 110 million people who regularly experienced temperatures above 40°C. In May and June, wildfires raged in Alberta, Canada, affecting air quality across swathes of North America. July witnessed the four hottest days globally ever recorded, with the average temperature hitting a 17.23°C peak on 6 July.
Together, these events place COP28 – the UN summit convened to address how member countries address climate change – into sharp relief.
With just over a month left until the meeting in the United Arab Emirates, there is a lot to contemplate.
Heating up: Earth's surface temperature since 1901
Concrete action is of the essence. One of COP28’s primary tasks is the Global Stocktake (GST) of the Paris Agreement, where national governments are required to submit their progress against their emissions reduction commitments.
As President-Designate to COP28, Dr. Sultan Ahmed Al Jaber, said in his recent letter setting out his vision for COP28, “the global community knows the GST will show we are off track”.
On that basis, he calls for an “immediate response package… which will need substance to make it real.” Quite rightly, in my view, he suggests the credibility of the COP process is on the line, calling on everyone at COP28 to “work together to renew trust… by delivering on previous promises”.
We must hope there is the will, as well as the way, to achieve this.
However, it is pleasing that we are now getting to the business end of this particular COP. Disquiet and debate has been a feature of having the summit in oil-rich UAE, with a President who is also CEO of the Abu Dhabi National Oil Company.
While I don’t wish to enter into that particular dialogue here, I would say that having countries of the Middle East, and indeed the energy industry, so directly involved is vital. As a firm, we have always found greater power through engagement, not divestment. The same principle must apply when it comes to COP28, tackling climate and addressing the just transition.
The UAE, and other MENA countries, need to be invested – even leading – in the transition to low carbon. With pressure from a decarbonising world on their oil and gas exports along with severe climate impacts in this water-stressed region, they will move to change.
With promises by the UAE, earlier in July, to invest as much as US$54bn into renewables in the next seven years in support of its efforts to reach net-zero emissions by 2050, the evidence suggests that these countries understand this.
Time will tell if the UAE can answer its COP28 critics, but if Dr. Al-Jaber’s presidency is able to deliver commitments to triple renewable energy capacity, capture greenhouse gas emissions and double energy efficiency to limit global warming, then the world will be far better placed to stay aligned to the Paris 1.5 degree target. Irrespective of who is hosting the event.
A just transition and biodiversity
There are two particular features of COP28 which I find notable.
First, that there will be a Just Transition day and that this is embedded as a key objective of the summit. Without redress, the poorest in the world are likely to suffer the most from the effects of climate change. It is incumbent on governments and companies alike to support those societies most impacted through reskilling and by ensuring that energy is affordable to all. Failure to do so, apart from being ethically questionable, will likely mean the transition to a green economy will be unsuccessful.
Secondly, and perhaps one of the most encouraging aspects of the COP28 high-level programme, is the increased emphasis on nature. It has become clear that nature-loss is as critical a danger as climate change.
At COP 28, two days are devoted to ‘Nature, Land Use and Oceans’ and ‘Food, Agriculture and Water’. As a manager of one of the few biodiversity funds on the market, not to mention the huge amount of work we do engaging with companies on the topic via EOS, our stewardship business, we know how important this work is.
Scaling the capital needed to invest in those circular and regenerative technologies and businesses that will mitigate biodiversity loss requires substantial collaboration between governments, industry and investors.
With Forest Trends reporting that 44% of the world’s tropical forests have been wiped out for agriculture in Latin America and the Caribbean alone, and with global population expected to reach 10-12 billion by 2050 (from around eight billion today), there is no time to lose.
There are great companies and great technologies for investors like us to consider. Those, for example, that can dramatically increase crop yields without requiring more land or advanced recycling technologies that stimulate the circular economy.
The Kunming-Montreal Global Biodiversity Framework signed by 196 nations at COP 15 last December, designed to halt and reverse biodiversity loss by 2030, was a crucial step.
COP28 is committing to the promotion and advancement of this framework, which is reassuring as we need governments to take action today to save and feed our world in the future.
Dr. Al Jaber says that COP28 “can be the turning point we need on climate action over this critical decade”. The “vast economic potential” he refers to is real and I remain optimistic the transition to a low carbon world is achievable. COP28 will be an important stepping stone to doing so.