Today marks the beginning of COP 30, and for the next eleven days all eyes will be on Brazil, including ours here at Ethical Screening. With over 145 agenda items, this COP is set to be another busy one, but we will be paying particular attention to a few issues.
Finance
The topic of financing to assist developing nations (especially those in the global South) transition to low carbon economies and invest in climate mitigation played a central role at COP 29, with parties agreeing that USD 1.3 trillion in financial capital should flow each year to developing nations by 2035.
However, a number of nations and organisations expressed dismay after the wealthiest nations agreed to provide only USD 300 billion of this financing, and this very issue is set to be discussed again at this year’s COP.
For us at Ethical Screening, we are interested to see what agreements (if any) are made regarding the role of the private sector in providing such finance. After all, the transition represents one of the biggest economic opportunities in history, as well as one of the biggest necessities.
The Ethical Stocktake
Secondly, we will be closely watching a new initiative, introduced by Brazil for COP 30, known as the Global Ethical Stocktake. In the hope of accelerating efforts to achieve the Paris Agreement, the initiative aims to introduce new perspectives to global climate discussions, with the results of dialogues conducted prior to COP 30 being presented at the conference. These dialogues were held across six continents, with input from social, cultural and spiritual leaders, alongside usual voices from business, scientific, and political communities.
This is of particular interest to us, given that efforts to contribute to the Transition can often overlook the need for a just Transition. Investors have the ability to reinforce this need via market signalling and engagement, and we hope that the results of the Ethical Stocktake will provide investors with additional resources to help with this.
Nationally Determined Contributions
Thirdly, we will of course be watching to see if agreements are made in relation to nationally determined contributions (NDCs). While these are government-driven targets, they may influence financial markets, and have ramifications for the private sector.
If, for example, revised NDCs for the UK necessitate major efforts for electrification of industry, or rapid development of EV infrastructure, companies providing solutions to these challenges are likely to see a surge in business, which may present opportunities for investors to generate returns while using capital to support companies leading Transition efforts.