Global government representatives, climate activists and business leaders will meet at COP28 Nov 30 through Dec 12. Read on to find out what ESG topics we anticipate will be front and centre at the event.
What is COP28, and why is it important?
Global government representatives, climate activists and business leaders will meet later this month at the United Nations’ 28th annual Conference of the Parties, also known as COP28. There they will take stock of progress in the fight to reduce the impacts of climate change and will negotiate further action.
Many heads of government who previously attended the annual conference will be sitting out COP28, including Canadian Prime Minister Justin Trudeau. While their absence may lower the profile of this year’s meeting, it also may afford participants greater opportunity to hash out solutions without the distraction of photo ops and political performances.
COP28 will cover a lot of ground in two weeks. Here are the topics we’re keeping an eye on:
The first Global Stocktake
COP28 represents an opportunity to hold countries accountable for their progress (or lack of progress) addressing the climate crisis. The conference will host a discussion of the findings of the first-ever Global Stocktake—a process established by the 2015 Paris Agreement to evaluate the world’s climate-related actions, including efforts to cut greenhouse gas emissions, improve resilience and secure financing. The Global Stocktake occurs every five years; the first installation began in 2022 and will conclude with a discussion of its findings at COP28. For the first time, countries participating in COP will be on display for what they have and haven’t done to honour their commitments.
Progress toward a new collective quantified goal (NCQG)
While we don’t expect COP countries to agree on the NCQG until next year, we would like to see participants use this year’s conference to begin the difficult process of identifying why they failed to hit the previous goal. And we hope to see them forge agreements, structures and incentives that provide a realistic path to meeting a much more ambitious and reality-based target.
Plans and policies for decarbonization
For COP28 to accelerate decarbonization, its participants need to reckon with the economic forces and vested interests at odds with the transition to a lower-carbon economy. The conference’s location in an OPEC member country puts this issue front and center. Energy-sector leaders are expected to attend; we look forward to hearing them explain what they need from governments to move forward on decarbonization. We also are keen to see the Canadian government put forward more credible decarbonization policies.
Just transition
The topic of a just transition is on the formal agenda for COP28—a recognition that any policy changes will have implications for vulnerable communities, particularly Indigenous people and workers in energy and other sectors traditionally reliant on fossil fuels. Such considerations are particularly relevant to Canada, which has relatively large representation from these groups.
We believe communities that are vulnerable to changes brought about by decarbonization must have a seat at the table and benefit alongside other parties from amelioration efforts. Canada has made some progress in this area. The federal government’s Sustainable Jobs Plan lays out a framework for transparency and proactive collaboration between public, private and civil society as well as Indigenous communities to mitigate adverse impacts and help ensure equitable distribution of economic benefits generated by the energy transition. We will be watching to see the degree of commitment other countries demonstrate towards a just transition and what form policies supporting it will take.
Loose ends from COP27
Participants at the last Conference of the Parties left a number of key matters unresolved. They included:
Provisions for adaptation. Countries in 2017 committed to providing funding to help developing countries adapt to the effects of climate change. At COP27, they agreed to double the funding promised by 2025. Yet key details remain cloudy. Countries have yet to set measurable targets for global adaptation, and although there is widespread consensus that global finance will need to play a key role in funding adaptation efforts, the specifics remain undefined.
Adaptation efforts have the potential to produce a wide range of compelling investment opportunities. Working together, investors and governments can build solutions that unleash global private capital to accelerate and scale essential adaptation projects. We will be watching to see whether leaders in the public and private sectors begin to formalize structures that make such investment possible.
We are looking for participants to rise to the moment: to recommit to climate change mitigation, adaption and justice, and to start making the hard choices necessary for rapid progress in each sphere. We hope that COP28 will prove to be a turning point in the global response to climate change—a moment of clarity in which COP countries back up their ambitious goals with equally ambitious actions.
Footnotes
1 https://apnews.com/article/libya-derna-dams-collapse-survivors-floods-chaos-1a2e0c06e61360580ab1277fdf3dae76↩
2 https://www.washingtonpost.com/weather/2023/08/02/july-hottest-month-global-temperatures/↩
3 https://www.worldweatherattribution.org/extreme-heat-in-north-america-europe-and-china-in-july-2023-made-much-more-likely-by-climate-change/↩
4 https://www.washingtonpost.com/weather/2023/10/18/canada-historic-2023-wildfire-season-end/↩
5 https://www.theguardian.com/environment/2023/sep/20/rishi-sunak-confirms-rollback-of-key-green-targets↩
6 https://unfccc.int/sites/default/files/resource/54307_2%20-%20UNFCCC%20First%20NDR%20technical%20report%20-%20web%20%28004%29.pdf↩
7 https://www.reuters.com/sustainability/canadas-emissions-reductions-unlikely-meet-2030-target-auditor-general-says-2023-11-07/↩
8 https://unfccc.int/sites/default/files/resource/54307_2%20-%20UNFCCC%20First%20NDR%20technical%20report%20-%20web%20%28004%29.pdf↩
9 https://www.iea.org/reports/world-energy-outlook-2023/executive-summary↩
10 https://corporate.exxonmobil.com/news/news-releases/2023/1011_exxonmobil-announces-merger-with-pioneer-natural-resources-in-an-all-stock-transaction↩
11 https://www.chevron.com/newsroom/2023/q4/chevron-announces-agreement-to-acquire-hess↩
12 https://www.theguardian.com/environment/2023/sep/20/rishi-sunak-confirms-rollback-of-key-green-targets↩
13 https://www.theguardian.com/environment/2023/nov/05/countries-agree-key-measures-to-fund-most-vulnerable-to-climate-breakdown↩
14 https://www.canada.ca/en/environment-climate-change/news/2023/09/minister-guilbeault-supports-advancing-climate-ambition-in-new-york-city.html↩
15 https://unfccc.int/climate-action/tracking-and-recognition↩
Any statement that necessarily depends on future events may be a forward-looking statement. Forward-looking statements are not guarantees of performance. They involve risks, uncertainties, and assumptions. Although such statements are based on assumptions that are believed to be reasonable, there can be no assurance that actual results will not differ materially from expectations. Investors are cautioned not to rely unduly on any forward-looking statements. In connection with any forward-looking statements, investors should carefully consider the areas of risk described in the most recent prospectus.
BMO Global Asset Management is a brand name under which BMO Asset Management Inc. and BMO Investments Inc. operate. Certain of the products and services offered under the brand name, BMO Global Asset Management, are designed specifically for various categories of investors in Canada and may not be available to all investors. Products and services are only offered to investors in Canada in accordance with applicable laws and regulatory requirements.
®/™Registered trademarks/trademark of Bank of Montreal, used under licence.
