The COP26 summit will bring parties together from across the globe to accelerate action towards the goals of the Paris Agreement. Eric Pedersen, Head of Responsible Investments at Nordea Asset Management talks about his hopes for the conference.
Why should investors take notice of COP26?
Investors should take notice of COP26 because of the urgency associated with climate change, which represents the single largest threat to both their own future prosperity and the environmental conditions they and their children will live under. We often feel there is very little we can do individually to combat and prevent such large-scale sustainability issues, like climate change, but our own experience tells us investors can make an impact. Investors have to navigate the structural shift that is happening as we speak. And while no-one can time the re-pricing of emissions heavy industries exactly, any movement especially on the issue of carbon taxes at this COP is a potential trigger to watch.
What are the key topics you will be following in the run up to, and during, the conference?
There are many areas we are and will be watching intently, including a strengthening of carbon pricing, the phasing out of fossil fuel subsidies, and regulatory action to accelerate the de-commissioning of thermal coal installations. We will also be looking out for mechanisms to facilitate what is referred to as a just transition – i.e. a transition where the dislocation caused by decarbonisation of the global economy is minimized and does not hit disadvantaged groups disproportionately.
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