Demystifying COP27

During an insightful morning at 'Demystifying COP27', the message was very clear: the need for climate action has become increasingly urgent. And coherent, practical solutions and global collaboration are critical as we move past thought leadership and into delivery.  

COP27 showed that the sustainable finance agenda is still incredibly strong, but the scale of the challenge is coming into view. We only succeed when we all succeed. We must do more. To put it bluntly, we need less talk, more action” 

The Rt Hon the Lord Mayor, Alderman Nicholas Lyons.

Highlights from Demystifying COP27 include:

Demystifying COP27 for UK financial and professional services

Moderated by Deputy Christopher Hayward, Policy Chairman at the City of London Corporation, the first panel session of the day touched on the key outcomes of COP27 for financial and professional services. Panellists discussed progress from GFANZ and the Transition Plan Taskforce in developing a usable transition planning toolkit for firms to deliver on their net zero commitments.  Highlights below:

• Thomas Tayler, Senior Manager at Aviva Investors highlighted the crucial need for insurers to produce and implement transition plans as underwriters for key sectors of the economy.  

The transition will take nothing less than the transformation of the entire financial system and its processes. It’s an all hands-on deck situation.

Thomas Tayler

• Jonathan Malim, Partner, Head of Debt Capital Markets & Structured Finance at Eversheds Sutherland, highlighted the need for better direction of travel and a robust plan for climate change within financial systems.
• Alice Carr, Executive Director of Public Policy at GFANZ, highlighted the work of GFANZ in the last year in developing a toolkit for transition finance that is a pan-sector usable framework for firms across the value chain to forge consistency. High on the GFANZ agenda is devising guidance on dealing with the phase out of high emitting assets that we rely on now but will eventually need to be eliminated.
• Kate Levick, Transition Plan Taskforce (TPT) Secretariat Co-Head, was pleased to see regulators increasingly looking at transition plans as a key regulatory tool. She gave an overview of the TPT’s new disclosure framework supporting firms to produce and implement transition with concrete plans to deliver on the ambitious net zero targets they have made.

Scaling Voluntary Carbon Markets (VCM)

Catherine McGuinness, Common Councillor, and former Policy Chair (2017-2022) at the City of London Corporation, chaired an engaging conversation centred around scaling voluntary carbon markets.

Panellists highlighted the beneficial role of voluntary carbon markets in the fight against climate change, as a means of channelling crucial climate finance from the global north to the global south:

• Nigel Howorth, Partner, Clifford Chance Global Environment Group and Environment and Climatic Trading Group, announced the launch of the paper: Enabling the Voluntary Carbon Market in the Context of the Paris Agreement by Clifford Chance. He highlighted its call to action for driving progress on Article 6 of the Paris Agreement, and his hope for the year ahead of seeing progress in removing uncertainly on how Article 6 will be implemented in domestic legislations. He also spoke about the need to ensure integrity in carbon markets and dealing with pressing issues like the double claiming of emission reductions.
• Chris Leeds, Head of Carbon Markets Development at Standard Chartered Bank, spoke of the work of the Integrity Council for the Voluntary Carbon Market (ICVCM). Through the ICVCM's Core Carbon Principles, buyers should be able to assess and trust the quality of credits. He also pointed out that compliance and voluntary carbon markets should evolve to be further linked and integrated.
• James Davis, Partner at Oliver Wyman, focused his intervention on the need to better frame how carbon markets can indeed be used to positively contribute to the fight against climate change and the channelling of funds towards the Global South. He suggested that corporates should absolutely prioritise decarbonisation first but should also think about contributing funds to carbon credits, using existing standards like the Core Carbon Principles from the ICVCM, and the emerging data solutions available. He said ‘’I would like to see a clear endorsement of how carbon credits are part of the solution’’
• Claire Dorrian, Head of Sustainable Finance at the London Stock Exchange Group (LSEG), spoke about the Foresight Sustainable Forestry, the first fund to use LSEG’s new Voluntary Carbon Market designation for funds which invest in climate mitigation projects that generate carbon credits.

With countries around the world making strides, the UK Government should stand firmly behind voluntary carbon markets and the role they can play against climate change

Claire Dorrian

Nature and Biodiversity – “Between two COPs: from COP27 to COP15”

Jon Williams, Partner and UK chair of Sustainability & Climate Change at PwC, moderated the final session of the morning focused on nature and biodiversity, as Montreal currently hosts COP15. 

Emma Howard Boyd, Director, Green Finance Institute (GFI), opened the panel session by setting the scene. She reminded the audience that ‘’we must keep reminding our regulators, governments and corporates, that there is a material risk of inaction when it comes to biodiversity loss, and there is a strong economic opportunity to investing in nature-based solutions’’. She announced the launch of GFI's new Investment Readiness Toolkit, supporting the creation of investment ready nature projects and mobilise private finance into nature restoration. Highlights below:

• Helen Avery, Director of Nature Programmes at the GFI, spoke of her hopes for COP15 around setting clear targets for pollution, greater policy alignment, and calls for progress on mandatory disclosures. She also highlighted that strong signalling from Government on the economic risks of biodiversity loss and on bringing in mandatory disclosures would encourage corporates and large polluters to engage in the discussion.
• David Craig, Co-Chair of the TNFD highlighted the TNFD’s risk management and disclosure framework, which will be finished in September 2023, after extensive testing by over 130 cross-sectoral projects all over the world. In response to firms pointing out the lack of available data, he said:

’Regulation is here now, and is coming in different forms… We need to break open the data excuse. We have data, but data isn’t everything, it needs context and understanding.

David Craig

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