By Vasishta Dasari, Alasdair Wood
This note summarises the key outcomes of COP26 with our thoughts on investment implications. As brief background, the United Nations Framework Convention on Climate Change (UNFCCC) includes 197 countries, or “Parties”, and is the parent treaty of the 2015 Paris Climate Change Agreement. The Conference of the Parties (“COP”) takes place annually for 2 weeks during which representatives from all countries involved negotiate on key climate-related policies. This year’s meeting culminated with all Parties agreeing to a final statement, The Glasgow Pact, which summarises the commitments and progress made at the meeting. These types of climate agreements tend to be messy compromises as they have to balance out the competing interests of almost 200 countries. However throughout the COP fortnight, a range of additional initiatives and alliances are usually announced. As all 197 countries do not have to agree to these additional initiatives, they tend to be more ambitious than the policies in the pact.
We summarise the progress made in key areas such as coal, methane and deforestation, both from The Glasgow Pact as well as any related additional initiatives and alliances.