Commentary

ICYMI, It’s Crunch Time in the Big Apple

This week, an Englishman, an American and an Australian walked into a climate crisis.

Climate diplomacy has dominated the 76th United Nations General Assembly (UNGA) so far this week. This was guaranteed by the lack of meaningful progress at previous multilateral discussions this year ahead of negotiations at COP26 in November.

But further impetus was added on the eve of the assembly, when the UN Framework Convention on Climate Change reported that countries’ current nationally determined contributions would see global greenhouse gas emissions rise to 16% above their 2010 levels by 2030. This puts the world on a pathway to climate change of 2.7 degrees Celsius, prompting dismay well beyond New York.

An Englishman, an American and an Australian took many of the headlines, although Chinese President Xi Jinping’s pledge to end financing of coal projects abroad and increase support for low-carbon energy was particularly warmly received.

The Englishman, UK Prime Minister Boris Johnson, warned of the dire consequences of humanity’s adolescent “narcissism”, urging us collectively to grow up and take responsibility, without a hint of irony, in an effort to maintain momentum on the road to Glasgow.

Regardless of its political reception, the speech did no harm in the financial markets, which lapped up the UK’s green gilt debut. Demand may also have been helped by the persistence of the greenium, reflecting strong investor appetite for a range of green instruments.

The American, US President Joe Biden, committed himself to working with Congress to redouble his country’s contribution to the US$100 billion per annum in climate finance for developing countries, thus helping to fulfil a promise made by developed countries in 2009, at COP15 in Copenhagen.

Admittedly not actually in New York, the Australian, Federal Treasurer Josh Frydenberg, paved the way for a net zero 2050 announcement by Prime Minister Scott Morrison ahead of COP26, asserting: “We have been part of that transition, we are part of that transition, and we will be part of that transition.”

Whether the change of tone was due to investor pressure or peer pressure in the wake of the recent AUKUS defence alliance, it will be positive news for the Pacific Island nations addressed virtually this week by Secretary General Antonio Guterres, for which the existential crisis is more real than for most.

The UNGA was also the cue for a slew of reports indicating promising but insufficient progress in the private sector, with targets being set, if not necessarily science-based, and some sectors falling way behind stakeholder expectations. This is prompting institutional investors to increase their scrutiny of the net-zero strategies of investee firms, while making detailed commitments of their own, with some beginning to harness people power as part of their engagement efforts.

As the world’s attention focused on the UNGA, many also noted the passing of John Ruggie, former UN Assistant Secretary General for Strategic Planning and later Special Representative for Business and Human Rights. Appointed following a distinguished academic career by Kofi Annan, Ruggie was the primary architect of the UN Global Compact and driving force behind the UN Guiding Principles on Business and Human Rights, which form the basis of much human rights due diligence legislation across the world today. Many tributes captured both the significance of his achievements and the warmth of his personality.

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