November 28, 2022

COP 27 takeaways

Following intense debate at the recent UN Climate Change Conference in Egypt, BNPP AM evaluates the outcome and initiatives for investors to bear in mind.

  • COP27 concluded with a breakthrough agreement to establish a USD 350 million ‘loss and damage’ fund to help those developing countries most vulnerable to natural disasters mitigate the long-term adverse effects of climate change.
  • 27 new pledges worth more than USD 230 million were made regarding the Adaptation Fund, a separate fund to help vulnerable communities in developing countries adapt to climate change.
  • COP27 also saw the launch of the Sharm El-Sheikh Adaptation Agenda, which details 30 actions to be taken by 2030 to improve the climate resiliency of such communities.
  • Indonesia signed a USD 20 billion agreement with developed countries and major international lenders to help increase its use of renewable energy.
  • Disappointingly, there was no broad push to reduce emissions more quickly despite commitments announced during the conference, most notably the EU's shift from a 55% reduction target to 57%.

“The Sharm el-Sheikh Implementation Plan estimates that a global transition to a low-carbon economy would need investments of at least USD 4-6 trillion per year.  According to the UN, such a transition will require central banks, commercial banks, institutional investors and governments to adjust rapidly so that the money becomes available.  As a sustainable investor, we have a key role to play, and as part of our efforts we recently announced 10 commitments to support targets to reduce greenhouse gas emissions and align our investments with Net Zero by 2050.”

Thibaud Clisson, Climate Change Lead/ESG analyst, BNP Paribas Asset Management