COP 27: "Humanity has a choice: cooperate or perish” UN Secretary General Guterres told delegates

Picture credits: Wired Italy

The UN Climate Summit has taken place this year in the second half of November. We are coming from a UK-led COP26, whose premises were a “warning invite” by Lord Attenborough and his so-called “tipping points” world climate leaders were kindly invited not to pass. [1]

Background featuring UN COP27 this year was not the best at all. Climate disasters in the kermesse preceding summer around the World warned leaders, institutions and enterprises too that the climate change issues are wedging on the edge of perilous standards now. The first (perhaps most relevant) hot issue is the vacant posts left by climate wise heavy-polluting countries (i.e. China, India and Russia). [2]

Despite this controversy, UN-led climate works continued in Egypt, with several agreements on policies addressing: first, a deadline to end deforestation, second, National Determined Contributions and Loss and third, Damage Mechanisms. While the first topic, deforestation, needed only a confirmation of goals and committment, NDCs were bound to be discussed by COP27 participants as much as there was a need for reassessment of Loss and Damage mechanisms, especially supported by the EU [3].

Looking at the conclusions of the climate summit, we can state that the most touched topic was sustainable finance. If, on the one hand, enterprises are still committing to the EU-wide targets set out in the Green Deal, there are still some arguments on sustainable financing instruments. While the newsapapers are signalling the first little ‘stop’ to sustainable finance and ESG investing [4], the Climate Bond Initiative is pinpointing that the global debt issuance of green, social, sustainability, transition and sustainability-linked bond has hit record high reaching 1 trillion USD in 2021 [5] what investment bankers [6] predict is that the next ‘sustainable debt issuance instrument’ are going to be the ‘blue bonds’ that currently look only as a subcomponent of ‘green bonds’ but will sooner have a proper, indipendent label - analysts say. [7]

Meanwhile, to tackle the increasing difficulties for the sake of protecting investees and investors, EU watchdogs are launching a consultation to address ‘greenwashing’ that has become an increasing phenomenon inside the EU. [8]

Overall, COP27 is a summit of reassessment amid the most important emergencies world leaders are called out to address in the next few months. However, there are some drawbacks to mention. First, countries that are mostly threatened by climate change wish far more progress in ‘climate adaptation financings’ as well as they demand a concrete reform stage in the World Bank strategies to increase intervention. [9] Then, while endorsing the EU-led actions, world leaders will have to get the absent China, India and Russia back on the climate table, if they really want to create a cohesive, global action against climate change – as the UN secretary general Guterres has addressed [10].

By Manfredi Morello

Sources

[1] M. Morello (2021) COP26: an overview on the next climate diplomacy summit. Csrnatives Blog. URL: https://www.csrnatives.net/post/cop26-an-overview-on-the-next-climate-diplomacy-summit

[2] NewYorkTimes.com (2022) Who’s attending COP27, and who isn’t. URL: https://www.nytimes.com/2022/11/07/climate/cop27-attendees-egypt.html

[3] Reuters (2022) COP27 debate on who should pay for climate loss and damage reopens old wounds. URL: https://www.reuters.com/business/cop/cop27-debate-who-should-pay-climate-loss-damage-reopens-old-wounds-2022-11-18/

[4] Cityjournal (2022) The ESG Bubble Is Bursting. URL: https://www.city-journal.org/esg-bubble-is-bursting

[5] Climate Bond Initiative (2021) Sustainable Debt Global State of the Market 2021. URL: https://www.climatebonds.net/resources/reports/sustainable-debt-global-state-market-2021

[6] Morgan Stanley Institute for Sustainable Investment (2022) Blue Bonds: The Next Wave of Sustainable Bonds. URL: https://www.morganstanley.com/content/dam/msdotcom/ideas/blue-bonds/2583076-FINAL-MS_GSF_Blue_Bonds.pdf

[7] Bloomberg (2021) Why the Hot New Shade for Green Bonds Could Be Blue. URL: https://www.bloomberg.com/news/articles/2021-03-22/why-the-hot-new-shade-for-green-bonds-could-be-blue-quicktake

[8] Euractiv (2022) EU financial watchdogs launch fact-finding dive into ‘greenwashing’. URL: https://www.euractiv.com/section/energy-environment/news/eu-financial-watchdogs-launch-fact-finding-dive-into-greenwashing/

[9] TheGuardian (2022) What are the key outcomes of Cop27 climate summit? URL: https://www.theguardian.com/environment/2022/nov/20/cop27-climate-summit-egypt-key-outcomes

[10] CBC.com (2022) UN chief says world is 'on a highway to climate hell' without urgent action to cut emissions. URL: https://www.cbc.ca/news/world/un-cop27-climate-guterres-gore1.6642844#:~:text=%22Humanity%20has%20a%20choice%3A%20co,impacts%20that%20have%20already%20occurred.