Belém proved COPs have a future – if they increase their focus on implementation and action, says Maria Nazarova-Doyle, Global Head of Sustainable Investment, IFM Investors.
It’s an age-old question: what came first, the chicken or the egg? Or, in our industry terms, is public policy driving the change in the economy, or is it business leadership and innovation that moves the dial, forcing public policy to catch up? Unlike the chicken/egg question, where AI confidently tells me that the egg was first, the answer to the policy/industry debate is a lot more nuanced.
This question arose once again in relation to the United Nations Framework Convention on Climate Change (UNFCCC) COP30 that just concluded in Brazil. Are these types of government-led events setting the direction of travel in global policy and catalysing action in the private sector, or are they desperately falling behind the real economy action that is happening across the world, trying to catch up to what is already being done? And if it’s the latter, do we even need COPs? Whichever way you might answer the first question, it’s clear that it’s time for a reform of the COP process – the fact that was acknowledged even by the COP itself, where for the first time this point was discussed as part of the main proceedings.
A COP with many faces
Set on the edge of the Amazonian rainforest in Belém, state of Pará, the choice of the location wasn’t accidental. This was a COP of many names, but first and foremost, it was a ‘Forest COP’ meant to bring the world to the Amazon region, showcase the wonder and richness of the area while also making the challenges visible. This was also, importantly, an ‘Implementation COP’ in recognition of the fact that most of the formal negotiation of the Paris Agreement articles has concluded, with the focus needing to move from negotiation to action. In addition, it was dubbed an ‘Adaptation COP’ highlighting one of the major agenda points this year where the Global Goal on Adaptation indicators and adaptation finance targets were being agreed. For completeness, it was also the ‘COP of Truth’ and a ‘Global Mutirão’. But it’s questionable whether it lived up to these two names, with fossil fuels not being mentioned in the final text and a lot of decisions gavelled through irrespective of many objections and points of order.
When it comes to implementation, adaptation and forests, this COP did deliver some notable progress. Bridging those three themes was the presidency’s crown jewel – the Tropical Forests Forever Facility (TFFF), an investment fund designed to pay tropical forest countries for preserving the forests, while also providing a return to investors. This is an example of the kind of implementation action that is practical and aims to deliver tangible outcomes, while also working at the nexus of climate change and nature. This facility, if it reaches its full target potential at US$125 billion (at the time of writing it was approaching US$7 billion), would help protect forests in 74 countries, making it the biggest global financial initiative in this area. Notably, 20% of payments would go to Indigenous peoples, which would also make TFFF the largest financial supporter for these communities.
This is a fantastic example of how COPs can use their high-level government standing to create collaborations and crowd in finance to help achieve some big ambitions.
Nature and adaptation are going to continue to be huge themes in the years to come, posing the big question: how do we invest in support of these themes? They are not as straightforward to capture as mitigation, however, opportunities do exist, particularly if we look at the cross-over of the two, pointing in the direction of nature-based solutions to support water cycles regulation, flood prevention and drought risks mitigation, while boosting biodiversity and ecosystems resilience. Whether these investment opportunities come through the private sector or through international collaborations like COPs, these are all valuable and couldn’t be timelier.
Signalling power
Going back to the question at the start, there is no question for me that generally businesses are at the forefront of global action on climate change, and they are the main source of constant innovation and technological advances to both help mitigate climate change effects and adapt to them. Nonetheless, UNFCCC COPs have a strong signalling power and the potential opportunity to raise the profile of issues or initiatives. And while they may not always lead from the front, it’s the reaffirmation of the direction of travel and the indication of movement of future government policy which are valuable for businesses and investors across the world. With timely and well-thought through reform, COPs can continue to play an important role in the global progress on climate change, nature degradation and other interrelated issues.
Importantly, focusing COPs on implementation and the action agenda could make them achieve more tangible outcomes, while formally bringing cooperation with other international organisations into its scope would allow these gatherings to openly collaborate with other international convention workstreams, like the UN Convention on Biological Diversity or the UN Convention to Combat Desertification. We are facing a plethora of interrelated and connected environmental and ecological crises and any attempt to address these issues systemically would go a long way to improve the outcomes for the people and the planet.
Belém proved COPs have a future – if they increase their focus on implementation and action, says Maria Nazarova-Doyle, Global Head of Sustainable Investment, IFM Investors.
It’s an age-old question: what came first, the chicken or the egg? Or, in our industry terms, is public policy driving the change in the economy, or is it business leadership and innovation that moves the dial, forcing public policy to catch up? Unlike the chicken/egg question, where AI confidently tells me that the egg was first, the answer to the policy/industry debate is a lot more nuanced.
This question arose once again in relation to the United Nations Framework Convention on Climate Change (UNFCCC) COP30 that just concluded in Brazil. Are these types of government-led events setting the direction of travel in global policy and catalysing action in the private sector, or are they desperately falling behind the real economy action that is happening across the world, trying to catch up to what is already being done? And if it’s the latter, do we even need COPs? Whichever way you might answer the first question, it’s clear that it’s time for a reform of the COP process – the fact that was acknowledged even by the COP itself, where for the first time this point was discussed as part of the main proceedings.
A COP with many faces
Set on the edge of the Amazonian rainforest in Belém, state of Pará, the choice of the location wasn’t accidental. This was a COP of many names, but first and foremost, it was a ‘Forest COP’ meant to bring the world to the Amazon region, showcase the wonder and richness of the area while also making the challenges visible. This was also, importantly, an ‘Implementation COP’ in recognition of the fact that most of the formal negotiation of the Paris Agreement articles has concluded, with the focus needing to move from negotiation to action. In addition, it was dubbed an ‘Adaptation COP’ highlighting one of the major agenda points this year where the Global Goal on Adaptation indicators and adaptation finance targets were being agreed. For completeness, it was also the ‘COP of Truth’ and a ‘Global Mutirão’. But it’s questionable whether it lived up to these two names, with fossil fuels not being mentioned in the final text and a lot of decisions gavelled through irrespective of many objections and points of order.
When it comes to implementation, adaptation and forests, this COP did deliver some notable progress. Bridging those three themes was the presidency’s crown jewel – the Tropical Forests Forever Facility (TFFF), an investment fund designed to pay tropical forest countries for preserving the forests, while also providing a return to investors. This is an example of the kind of implementation action that is practical and aims to deliver tangible outcomes, while also working at the nexus of climate change and nature. This facility, if it reaches its full target potential at US$125 billion (at the time of writing it was approaching US$7 billion), would help protect forests in 74 countries, making it the biggest global financial initiative in this area. Notably, 20% of payments would go to Indigenous peoples, which would also make TFFF the largest financial supporter for these communities.
This is a fantastic example of how COPs can use their high-level government standing to create collaborations and crowd in finance to help achieve some big ambitions.
Nature and adaptation are going to continue to be huge themes in the years to come, posing the big question: how do we invest in support of these themes? They are not as straightforward to capture as mitigation, however, opportunities do exist, particularly if we look at the cross-over of the two, pointing in the direction of nature-based solutions to support water cycles regulation, flood prevention and drought risks mitigation, while boosting biodiversity and ecosystems resilience. Whether these investment opportunities come through the private sector or through international collaborations like COPs, these are all valuable and couldn’t be timelier.
Signalling power
Going back to the question at the start, there is no question for me that generally businesses are at the forefront of global action on climate change, and they are the main source of constant innovation and technological advances to both help mitigate climate change effects and adapt to them. Nonetheless, UNFCCC COPs have a strong signalling power and the potential opportunity to raise the profile of issues or initiatives. And while they may not always lead from the front, it’s the reaffirmation of the direction of travel and the indication of movement of future government policy which are valuable for businesses and investors across the world. With timely and well-thought through reform, COPs can continue to play an important role in the global progress on climate change, nature degradation and other interrelated issues.
Importantly, focusing COPs on implementation and the action agenda could make them achieve more tangible outcomes, while formally bringing cooperation with other international organisations into its scope would allow these gatherings to openly collaborate with other international convention workstreams, like the UN Convention on Biological Diversity or the UN Convention to Combat Desertification. We are facing a plethora of interrelated and connected environmental and ecological crises and any attempt to address these issues systemically would go a long way to improve the outcomes for the people and the planet.
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