ESG Essentials: Developments at COP28 and a new nature target setting framework

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National energy outlooks vary widely amid calls for a “phase down” of fossil fuels

As delegates gather in COP28 this week, calls for a “phase down” of fossil fuels is already one of the most complex (and most contentious) talking points. Data from the New York Times shows that nations around the world have radically different outlooks and attitudes on energy generation. 

While some nations, particularly in the West, are taking steps to improve the sustainability of energy generation, the picture that emerges is complicated. For example, the UK has seen a sustained increase in renewable energy and the near total elimination of coal, but still relies heavily on natural gas.

Large developing nations such as China and India have fuelled their rise overwhelmingly with high-polluting coal, which makes the impressive growth of renewables pale in comparison.  

As nations gather to discuss the transition away from fossil fuels, something that scientific consensus holds is deeply necessary, these realities will naturally conflict with each other.

Finance for Biodiversity Foundation: Nature target setting framework launched

The Finance for Biodiversity (FfB) Foundation launched a version of its nature target-setting framework for asset managers and owners, developed in line with the Kunming-Montreal Global Biodiversity Framework, The framework currently emphasises investors setting targets to address the impact of stewardship activities and capital allocation decisions on nature loss. The FfB outlined TNFD aligned targets for nature-related impacts by 2026, followed by sectoral, engagement, and portfolio coverage targets to be achieved by 2030 or earlier.

The guide also covers engagement targets such as investee companies introducing nature policies or portfolio companies disclosing TNFD recommendations.

COP28: Global North to argue meat should stay on the table

With food systems and agriculture finally making their way onto the COP28 agenda, two-thirds of the food served at the event will be plant-based. An edible reminder that the food industry produces one-third of global greenhouse gas emissions.

Investors have long called for clearer direction from policymakers through a roadmap that could guide effective areas for investment. COP28 is widely expected to finally implement this guidance after significant pressure from organisations such as the FAIRR initiative, which authored an investor letter backed by institutions controlling $18tn in assets.

Most observers expect that this roadmap will focus on how policymakers and investors should encourage various technologies and farming practices, as opposed to more wide ranging policy ideas such as measures that would reduce the amount of meat in worldwide diets. Even so, progress on this area could be instrumental in reducing worldwide emissions and facilitating more effective investment in the sector.

COP28 controversy as conference president argues there is “no science” behind fossil fuel phase out calls

COP28 President Sultan Al Jaber was at the centre of a fierce controversy last week as reporting by the Guardian had revealed that he had disputed the science behind calls for a phase down of fossil fuels.

On a live video conference, Al Jaber was seen saying “There is no science out there, or no scenario out there, that says that the phase-out of fossil fuel is what’s going to achieve 1.5C.” going on to say “show me the roadmap for a phase-out of fossil fuel that will allow for sustainable socioeconomic development, unless you want to take the world back into caves.”

This stance would put him out of line with many climate scientists, as well as the UN president, who have long argued that the world urgently needs to halt the expansion of fossil fuels. He later walked back his comments, saying that a phase down was “inevitable” but that governments needed to be pragmatic on how they achieved it. He also argued that his remarks had been misinterpreted and misrepresented, saying that, in fact, he had repeatedly argued for a phase down of fossil fuels in line with current scientific consensus.

As the head of ADNOC, the UAE’s state owned oil company, the appointment of Sultan Al Jaber as president of the world’s largest climate conference was an unpopular decision with many. These comments will likely only add to these doubts.

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