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Sustainable Finance Community Update

Working towards a sustainable future

An IFoA Sustainability Board initiative. Follow us on LinkedIn and Twitter for further updates and insights, and subscribe to the newsletter here.
12th November 2021
Will it be 26th time lucky or will another COP fail to deliver the agreements and plans required to prevent further climate change? Today (12th November) is the final day of COP26 where negotiations are still taking place. Alok Sharma, President of COP26, has said negotiations face a “monumental challenge” to deliver a credible deal but officials still hope to have an agreed-upon text ready by the scheduled end of the summit - see in the news section for more details.

Image: Glasgow Science Centre has been hosting the public over the last 2 weeks as the acting COP26 Green Zone. Photo by Fredrika Carlsson on Unsplash
In the spotlight
Sustainability and Climate Risk Course
The IFoA is launching a Sustainability and Climate Risk course which will be designed to ensure you have the skills, knowledge and tools to help the profession and your clients in the fight against climate change. Interested in keeping up to date with developments?
Sign-up here (IFoA)
In the news
COP26 negotiators face ‘monumental challenge’ as summit running out of time, says Sharma

Alok Sharma, President of COP26, held a news conference where he urged all countries to “put pressure on every sin to get a timely result” of which we can all be proud, warning: “We still have a great challenge ahead of us.”
The final phase of the talks is focusing on finding “the way forward” on finance and carbon markets, he said, adding: “The talks on finance really need to accelerate and they need to accelerate now.”
UN Secretary-General Antonio Guterres said this week that the goal of limiting global warming to 1.5C is “on life support”, as talks to meet the UN’s priority to halve carbon emissions by 2030 have come nowhere near.
Read the article here (The Independent – paywall)
Does the maths on Mark Carney’s $130tn net zero pledge stack up?
Flanked by the chief executives of BlackRock and Citigroup at the COP26 summit, Mark Carney said that until now there had not been “enough money in the world to fund the transition” to renewable energy by 2050, but thanks to the Glasgow Financial Alliance for Net Zero, or Gfanz, “we have all the money needed”. However, questions have been asked as to whether the headline figure of $130tn of private sector money really stacks up.
Firstly, as Ben Caldecott, director of the Oxford Sustainable Finance Group pointed out, the headline $130tn figure was “not a fresh pool of money, and most of it isn’t allocatable”. It included home mortgages and money to fund fossil fuel infrastructure. Secondly, there is likely to be double counting. For example, the funds aligned to pension schemes, such as the Church of England’s, would mostly be managed by companies that are already signatories, including Vanguard and Legal & General. Lastly, critics say that the $130tn figure made some big assumptions about whether investment managers and banks would stick to their commitments. Gfanz has already been criticised for allowing banks to sign up to its pledge while continuing to finance fossil fuel companies, including new exploration projects.
Read the article here (FT ‑ paywall).
Total financial re-engineering needed to avoid climate disaster, says expert

The climate crisis cannot be tackled, and global disaster averted, without re-engineering the world’s financial systems to align them with decarbonisation and sustainability, according to an investment expert determined to achieve fundamental changes in how capital is used.
Steve Waygood, head of responsible investment for Aviva Investors, believes that “the most important thing we can do is to price carbon properly. That doesn’t mean there will be one global carbon price, it will be set in different ways in different places. There are many different ways to make carbon matter to companies.” It is also essential, Waygood argues, that regulators focus less on the damage that transitioning to a net zero economy will have on businesses in the next few years, and more on the damage to the whole planet if we don’t take radical action now.
Read the article here (Pinset Masons)
Indonesia says COP26 zero-deforestation pledge it signed ‘unfair’

Indonesia signed up to a deforestation pledge at COP26, but has since said the country’s development must come first, taking the example of forests that needed to be cut down to build new roads and cultivate food crops.
The country has recently set itself ambitious targets for deforestation, including halving the deforestation rate over the next three decades as well as reforesting 26m acres of land by 2050. However, the recent pledges are at odds with development projects approved by the Indonesian government, which will likely see 136m acres of forest cut down by 2040. “Forcing Indonesia to have zero deforestation in 2030 is clearly inappropriate and unfair”, said Siti Nurbaya Bakar, the environment minister for Indonesia.

According to a spokesperson for British Prime Minister Boris Johnson, Indonesia’s development plans would be consistent with the pledge since what countries have committed to is to end net deforestation, ensuring that any forest loss is replaced sustainably.
Read the article here (The Guardian).
Obama grabs summit spotlight; talks get tough: COP26 update

Former US president Barack Obama took centre stage at COP26 where he implored nations to work together on climate matters and urged young people to get involved. Germany’s Flasbarth said that the arrival of Obama at the conference would give the talks some important momentum going into their second week since Obama’s presidency opened politics for more climate mitigation.
Some of the other developments include:
  • Minister of environment of Dominican Republic called for grants and not debts for poorer nations
  • Germany announcing a further 150 million euros to help developing nations to adapt to climate change
  • BlackRock Investment Institute’s estimate of 1 trillion USD per year for emerging markets to achieve net zero by 2050.
  • Chinese extra coal output exceeding Poland’s annual output
  • Fossil fuel lobbyists having 503 delegates, making it the largest delegation had it been a country
Read the article here (Bloomberg Green).
Tune in
Watch live: Full coverage of the COP26 summit

Sky News is hosting live rolling coverage of the panels, talks and discussions at COP26, as well as guest interviews as part of its 'Climate Live' broadcast. Watch live from Sky News here.
There is a handy summarised breakdown of what is expected each day here , and a tracker of what has been agreed so far here.
Reasons to be cheerful: Your one-stop COP(26) ‑ one week in

 Ed Miliband brings you the voices of young activists demanding change, including Anna, a young Glasgow climate striker. Then he talks to Simon Stiel, Minister for Climate Resilience in Grenada and Pete Betts, former top UK civil servant on climate negotiations, now a leading voice on the state of the play. Plus, co-host Geoff pitches in with his impressions from the outside and Ed tells us what a ‘Jack and Jill’ bathroom is and who he shared one with this week.
Listen on demand here (PodBean)
Climate, health, and COP26 in the time of COVID-19: Five asks for the global health sector

There is no doubt that the COVID-19 crisis has overwhelmed national health systems and derailed global health agendas. But the global health sector cannot continue operating business as usual – as if the climate is stable. Worse, the dire situation of the world’s health will be further exacerbated if the climate emergency ensues, argues Dr Renzo Guinto (Section Editor for PLOS Global Public Health’s Planetary and Environmental Health Section).
Guinto makes five asks of his colleagues in the health profession:
  1. Every health professional must embrace climate change as a personal and professional issue – affecting practice, patients, and communities.
  2. Every health profession school must ensure that the curriculum covers the climate crisis, its impacts on health, and the actions that can be done by the health sector to tackle this emergency.
  3. Every hospital and healthcare facility must have conducted climate and health assessments and designed climate and health plans and strategies.
  4. Every professional society and health advocacy organization must speak up for climate action and incorporate climate change into their mission.
  5. Every local, regional, and national health system must have implemented climate and health assessments and developed plans to enhance system resilience and reduce healthcare’s carbon footprint.
Read the piece here (Speaking of Medicine).
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Communication is at the heart of shifting mindsets on climate and sustainability issues, and is vital in highlighting and understanding steps we can take as finance professionals to implement positive change.

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The weekly newsletter summarises information from different sources for the benefit of subscribers. While we take care to select articles, papers and opinions from reputable sources, we do not perform independent verification and hence these summaries should not be relied upon for any purpose. Further, the statements, opinions and conclusions that are summarised within the newsletter do not necessarily represent the views of the IFoA nor the newsletter authors and their employers.

This initiative is brought to you by the Institute and Faculty of Actuaries (IFoA) Sustainability Board (formerly Resource & Environment Board). The Sustainability Board is a group of voluntary actuaries working with the IFoA to encourage change within finance. We work alongside - but separately to - the IFoA and as such this is not an IFoA communication. Find out more about the IFoA Sustainability Board here.

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