In little more than a month, another COP will be upon us.
The United Nations’ 28th global climate change conference has not been short of critics since it was announced that it would take place in Dubai and chaired by the chief executive of the United Arab Emirates state-owned oil company.
Recent COPs have also been criticised as talking shops that move little forward, and see commitments that are too small or which have to ‘rescue’ the standing of the event as the primary global summit driving action on climate change.
But apart from its location, this year’s COP does feel a little different. The increasing politicisation in major western economies of the lifestyle changes and costs that will come with the transition to cleaner ways of living has brought the commitments - and investments - that industry has made to a net zero future into sharper focus.
As happened in the UK when Prime Minister Rishi Sunak announced a softening of deadlines for the phasing out of fossil-fuel powered vehicles and heating systems, large companies that have set themselves on a road to decarbonisation have become vocal in their calls for politicians to stick to their commitments, not least given the amounts already invested by companies and their pledges to stakeholders.
As things begin to warm up for COP28, 131 of the world’s largest firms this week wrote a joint open letter calling for COP28 delegates to commit to reaching totally decarbonised power systems by 2035 for richer economies, and help developing countries financially so they can stop using fossil fuels by 2040 at the latest.
Media have already begun to report on the likely geopolitical tussles that will dominate COP28, with alignment between China and the US - a thorn in the side of previous COP agreements - in the spotlight.
Meanwhile, the European Union has been hammering out its own consensus on what it wants to see from the Dubai event, with an apparent softening on the overall stance needed to get it through. The wording of supporting a drive for a “predominantly fossil-free” global energy sector “well before 2050” and a “fully or predominantly decarbonised power system in the 2030s,” points to its own back story.
And it wouldn’t be a COP without a foreword from Al Gore, who has predicted that talks in the UAE will ultimately fail. From a UK perspective, confirmation that King Charles will attend should at least make for more prominent headlines when the conference kicks off at the end of next month.
The crosswinds blowing across ESG investing this week may hardly have increased the optimism. The New York Times packaged news of Chevron’s Hess deal as a signal that “big oil” was growing while ESG funds were falling out of favour, while the Financial Times ran an opinion piece on ESG’s self-made demise.
We’ve outlined here already why ESG has to evolve, and actually has the weight of the investment world broadly behind it.
It would be wrong to confuse the noise around more effective ESG investing with that around corporate unrest over political alignment and clarity though.
The ESG debate will rumble on, while COP28 may result in business and politics being increasingly at odds over the transition to net zero, and the application of the policies that will support economies to get there.
The ESG News Review is written by Steve Earl, a Partner at PR agency BOLDT.
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