FINN Partners Pulse on COP27
November 7, 2022
Environment and ESG Communication Policy
A Meeting That Matters
From November 6-18, the 27th Conference of the Parties (COP27) of the United Nations Framework Convention on Climate Change (UNFCCC) will convene in Sharm El-Sheikh, Egypt. This annual meeting brings together representatives of the 198 counties that have signed the 1992 UNFCCC, an international treaty to limit average global temperature rise and to encourage global cooperation to address the impacts of climate change. Efforts of the parties are supported at COP by leaders from inter-governmental organizations (IGOs), non-governmental organizations (NGOs), non-profits, and business leaders from the private sector.
While contentious at times, the COP is one of the only international forums in which decision- and policymakers from across the globe come together with civil society to engage and align on how to address climate change, the most pressing environmental, social, and economic challenge of our time.
This year’s host country, Egypt, has laid out four priority areas to drive the focus and dialogue between all parties: mitigation, adaptation, finance, and collaboration.
Our POV: New ideas and policies that have a wide-ranging effect on industries, economies, and civil society are proposed and committed to at the COP, and the downstream effects of these can inform policy direction and areas of business opportunity and innovation within the private sector.
What to Watch For
Tangible Action on Loss and Damages
The issue of loss and damages is expected to take center stage at COP27. The term “loss and damages” refers to the permanent loss or repairable damage (such as infrastructure harmed by a natural disaster that can be rebuilt) caused by the effects of climate change. This includes quick-onset events such as hurricanes or flooding as well as slow-onset events like sea-level rise or desertification. The term is also used to refer to economic or cultural losses.
In the wake of massive flooding in Pakistan and persistent droughts across much of Africa and Asia, many developing nations are calling out another year of non-action by developed countries as unacceptable.
Our POV: With COP27 being positioned by Egypt as the “COP of action,” these hardest hit countries will be seeking concrete commitments to address loss and damages.
Action on Emissions Reduction in Uncertain Times; Investing in Energy Security
Last year’s COP26 concluded with the signing of the Glasgow Climate Pact, which specifically sought to reduce the gap between nations’ current emissions reduction plans and what is needed to limit global warming to 1.5°C.
At COP27, it is expected that some world leaders may put forward new and ambitious plans for reducing emissions in the wake of a year marked by natural disasters, the ongoing impacts of Russia’s war in Ukraine, and the current energy crisis dominating Europe.
Bottom line, nations are looking for alternative markets and sources to ensure energy security. The International Energy Agency (IEA) has noted that energy security and industrial policy are significant market drivers as many nations seek to increase investments in renewable energy to help gain a competitive edge in the energy industry of the future.
The challenge for global leaders will be to commit to and enhance emissions-cutting pledges in the short-term even as energy prices and inflation remain high. In the long-term, while the outlook for a renewable energy transition appears promising, there is concern that the current path to adoption is insufficient to keep warming below 1.5°C.
Our POV: We can expect the parties at COP to wrestle with how to ratchet up ambition for emissions reduction targets and subsequent implementation.
The annual convening of world leaders at COP is foundational to setting and driving the global climate agenda. This year, those that gather will need to show resolve to adhere to and expand economy-wide emission reduction policies in these uncertain times. The spirit of international cooperation that is at the heart of the UNFCCC must also drive unprecedented investment in innovation to create a secure energy future. With COP27 being billed as the “COP of action,” it will be crucial to ensure that not only are commitments made, but that implementation timelines and processes are set and agreed to.