Christi Vosloo, head of ESG, UK at Mayfair Capital
The latest IPCC report sent a stark warning of a ‘code red for humanity’ and it is evident we are not on track for 1.5°C, with the possibility of achieving this becoming less and less likely. As a result, this summit is a critical point in time, requiring nations to go even further than agreed in Paris.
The outcomes of COP26, if positive and decisive, can accelerate the pace of climate action with have significant implications for the real estate industry. Existing portfolios will need to rapidly respond to more ambitious targets and increasingly stringent regulation to ensure these are resilient and future proofed.
The focus on adaption and resilience can enhance the requirements for planning, biodiversity considerations and resilient design. Increased finance support can serve to accelerate and enable the transition, providing key mechanisms/subsidies the sector can leverage.
Whitney Voûte, head of investor relations at US Solar Fund
Given the urgency of the UN IPCC report, I hope to see clearly defined deliverables and a commitment to more global collaboration and coordination from leaders at COP26. In particular, it would be pleasing to see more commitment to a true global carbon market.
In the immediate aftermath of COP26, we will hopefully see increased attention on and interest in ESG and sustainable investments already available to investors, driving more capital to support the energy transition and other critical sustainability initiatives.
Longer term, we would hope to see continued growth in the market opportunity for sustainable players like ourselves – we are seeing strong demand for solar given the Biden administration’s initiatives, as well as demand from corporates and other offtakers.
Michael Ackerman, CEO of EcoForests Asset Management
Developed countries have effectively forced the deforestation problem onto a developing world that has often lacked the governance and financial systems to resist the depletion of its natural capital – indirectly transferring massive wealth to the world’s wealthiest nations. The world’s poorest countries are on the front line of the battle for the planet and face the unenviable choice between the survival of natural resources and financial wealth. They need urgent help from the most powerful nations and deepest pocketed investors.
We want to see major institutions and powerful governments take action with a system of financial incentives and penalties, to rebalance financial returns from deforestation to reforestation – as well as direct capital investment into wholesale reforestation of the developing world. These will need to be mandatory and voluntary to work.
They could include, for example, tougher ESG screening on sovereign debt issues, increasing the cost of capital for nations who continue to permit environmental destruction, as well as greater law enforcement support to fight deforestation. Combined with inflows of private capital, that will allow land to be acquired and reforested, and provide sustainable employment growth for local populations.
Corné Biemans, portfolio manager of the Boston Common Global Impact Equity fund, Boston Common Asset Management
Given the alarming findings of the UN’s recent IPCC report, we hope COP26 produces agreements that urgently push governments, companies, and investors to act on climate.
From a policy perspective, governments from across the world, in particular those of large emerging markets, have to work towards mandatory climate disclosure laws. Although many organisations large and small have embraced voluntary disclosure, this is simply not enough. Mandatory disclosure across markets – aligned with the Taskforce for Climate Related Financial Disclosure – would level the playing field for investors and financial supervisors.
Additionally, it’s vital that companies ramp up assessments of climate risks and impacts across their entire value chain, particularly those present in supply chains. Businesses should be required to provide robust transition plans aligned with the 1.5°C global temperature increase ceiling, including time-bound and science-based emissions reduction targets, strong interim goals for 2025, and enterprise-level climate strategy with board level oversight.
As for investors, we must ensure net-zero commitments are robust – not just a numbers game. This will involve utilising carbon accounting tools across a number of asset classes, and expanding expectations around political and lobbying activities.