“Real success can only come if there is a change in our societies and in our economics and in our politics”
The UN Sustainable Development Goals (SDGs) provide a shared blueprint for peace and prosperity for people and the planet. As the UN itself puts it, the 17 SDGs are an urgent call for action by all countries. They recognise that ending poverty and other dispossessions must go hand-in-hand with strategies that improve health and education, reduce inequality, and spur economic growth, while tackling climate change and working to preserve our oceans, forests and the precious species that live in them.
One of the key challenges for policy makers, advocates, businesses and investors is to balance the many contradictions inherent in the SDGs. Prosperity requires energy but the current sources of energy are major contributors to climate change. The UN Climate Change Conference COP26 held in Glasgow in November this year highlighted that one of the greatest and most urgent of these contradictions is the need for an energy transition towards a low carbon economy and net zero by 2050.
Innovation and technology are key to finding solutions to the climate crisis. Much of it will be provided by companies that have the knowledge and resources to develop the technology required and the capital to produce it at scale. That is why climate change, perhaps the greatest challenge of our generation, is not only a risk from an investment perspective but also an opportunity, with significant potential for financial returns for those companies that are the enablers in the transition to a net-zero economy.
COP 26 – the key achievements
As COP 26 drew to a close this November, it arguably lacked a transformational deal like the 2015 Paris Agreement. Nonetheless it achieved some important steps forward.
Coal was a major area of focus with over 40 countries signing the Global Coal to Clean Power Transition Statement. The agreement creates a pathway to transition away from unabated coal power generation, for major economies by the 2030s and globally by the 2040s. Signatory countries also committed to cease the issue of new permits for unabated coal-fired power generation projects as well as government financing of such projects internationally. Limiting the impact, however, China and India, who together consume roughly two thirds of the world’s coal, did not sign the agreement, nor did Australia, a leading coal exporter.
Other important agreements during COP 26 included the Global Methane Pledge, signed by over 90 countries, committing to reduce methane emissions by 30% by 2030; the Glasgow Leaders’ Declaration on Forests and Land Use, signed by 105 countries, pledging to commit to work collectively to halt and reverse forest loss and land degradation by 2030; a pledge by 14 countries to advocate for the International Maritime Organization to adopt a net zero goal for shipping; the International Aviation Climate Ambition Coalition declaration, signed by 20 countries; advocating for the International Civil Aviation Organization (ICAO) to commit to a long-term emissions target; and a declaration to accelerate the transition to 100% zero emission cars, signed by 31 governments, committing to work towards phasing out sales of new gasoline and diesel-powered vehicles by 2040 worldwide. Finally, more than 40 countries pledged to achieve near-zero emission steel production by 2030, make affordable low carbon hydrogen globally available by 2030, make zero emissions vehicles the new normal by 2030, and make clean power the most affordable and reliable option for power needs by 2030. The US, the EU, India, Japan, Australia and the UK were among the signatories to all four pledges, while China only signed on to the Hydrogen pledge.