This week in ESG
Global temperatures keep on rising and pressure climbs at the COP 29 climate gathering.
Key highlights
🔥2024 set to be the hottest year on record – Copernicus Climate Change Service (part of the EU’s Space Programme) reports that the earth is virtually certain to exceed its temperature record, almost tipping the world over its goal to keep temperature rises below 1.5°C.
💭 Canadian oil and gas emission permits – the Canadian government plans to launch a ‘cap-and-trade’ system. Companies will be allocated set emission allowances each year, with the option to trade these and profit from lowering emissions. The number of permits provided would then fall each year.
🌳 SDR labels gain momentum – after a difficult start, more funds are being approved to adopt Sustainable Disclosure Requirement (SDR) labels, after overcoming an arduous FCA process.
🚫 Blackrock drops ‘sustainable’ from fund name – BlackRock were forced to drop the word ‘sustainable’ from its American Income fund. This is in response to new SDR and ESG labelling rules that have a December deadline.
💰 Invesco fined for deceptive ESG claims – the US Securities and Exchange Commission (SEC) fined the fund manager $17.5m for falsely claiming up to 94% of its assets were ‘ESG integrated’, while failing to include non-ESG assets from its large passive book.
Spotlight - COP 29
Source: APnews.
Activists at the Baku Olympic stadium, outside COP 29, spell out 'pay up' in a message to the world.
Why this matters?
The 29th Conference of the Parties (COP 29) takes centre stage this week in Baku, Azerbaijan, running from 11th -22nd November.
This year’s focus is on finance, with provisions falling a long way off the trillions needed to prevent the worst effects of climate change and adapt to its now unavoidable consequences. There are still big questions to be ironed out including exactly how much money is required, and where it'll all come from.
‘Rich’ countries had already pledged $100bn a year to help support poor countries, but this goal (only recently met) is now set to expire. Today, some developing countries say the actual figure required is closer to $1trn a year until the end of the decade. A figure that almost certainly won’t be paid. There’s also been bickering about where financing should come from as the definition of ‘rich’ countries is less than clear. China still classes itself as developing so can draw funds without contributing to the pot. But is this fair for an economy producing over 25% of the world’s emissions…with its own space program?
As the effects of climate change become ever more severe, and the opportunity to keep temperature rises below the 1.5°C target continues to shrink, the world really needs a tangible positive outcome from the conference. Something not helped by the Azerbaijan’s president using his keynote speech to proclaim that oil and gas is a ‘gift from god’.
Read more insights into COP 29 from our Ethical Oversight Committee (EOC) in their recent interview - COP, Trump, and the path ahead for investors.
We'll also be providing further commentary once COP 29 comes to a close on the 22nd.
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