What are investors hoping to hear out of COP26?

Trillions in private financing is needed to transition to net zero by the middle of the century. The 26th UN Climate Change Conference of the Parties (COP26) presents an opportunity to offer investors policy certainty and to mobilise capital.

The investment sector, which manages around USD 120 trillion of capital, is increasingly committed to net zero. Christopher Kaminker, Head of Sustainable Investment Research, Strategy and Stewardship, spoke to Money FM about the upcoming climate conference and what investors are hoping to hear from policy makers when it comes to the transition.

“This time last year, around 20% of the global economy was covered by a net-zero goal. Today it is 80%. What investors are hoping to see is, and what will really move markets and cause capital to flow is whether those goals are credible and whether they are going to have an impact in terms of regulation and in terms of the different interventions governments will make on the way to 2050,” said Kaminker.

“Here in the UK, we’ve seen a net-zero goal followed up by very ambitious mid-term targets. We have also seen legislation come in place, enshrining these goals in law. There has been a ban on the sale of new internal combustion engine vehicles by 2030, a power sector that will be decarbonised by 2035, and other incentives coming into play. These are the type of policy interventions that investors really look to as it provides a credible path to deploy capital.”

Kaminker also outlined what policy announcements and clarifications could further boost net-zero investment, including the introduction of a global minimum carbon price, as well as progress on adaptation financing and forward-looking metrics.

Click here to listen to the full interview

Sustainability is a core investment conviction at LOIM, which is why we are pleased to be attending COP26 in order to present our views on the transition to a net-zero economy. Click here for more information on the Zero-Hour Sessions at COP26.

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