The next UN climate conference will be held in Sharm El Sheikh from 7 to 18 November. The organisers expect more than 35,000 people to attend the event in the Egyptian seaside resort, where over 2,000 speakers will be wrestling with the issue of how implementation of the Paris Agreement – limiting global warming to well below 2 degrees – can be accelerated and clarified. Among those travelling to COP 27 from Switzerland will be federal president Ignazio Cassis. The Swiss parliament gave the national delegation its mandate back in August. In Sharm El Sheikh, the representatives of Switzerland are to bang the drum for a working agenda that leads to concrete decisions for protection of the climate. “This especially in the sectors which are responsible for the major part of the emissions,” the parliament wrote in a press release. In that regard there is a particular need for action in transport and industry: in 2020 these two segments were responsible for more than half of Switzerland’s greenhouse gas emissions (see graph). This was revealed by the greenhouse gas inventory presented by the Federal Office for the Environment (BAFU).
“Current CO2 legislation specifies that by 2020 greenhouse gas emissions within Switzerland were to be reduced by 20% compared with 1990,” the BAFU states. This national climate protection target was just missed, with emissions of polluting gases in the prevailing period declining by 19% from the base year (see graph). On the other hand, Switzerland has met the international goal formulated in the Kyoto Protocol, which provides for an average 15.8% reduction in emissions for the 2013 to 2020 period compared with the 1990 level. Although CO2 output actually only fell by an average of 11%, according to the BAFU Switzerland can compensate for the shortfall with reductions in emissions from climate protection projects abroad. Nevertheless, Berne is working on a further revision of the CO2 legislation with the aim of delivering a halving of greenhouse gas emissions by 2030. Last year the first attempt to amend the regulations failed in a referendum.
Switzerland is only one of many countries that will be going to COP 27 with ambitious targets. In her recent state of the Union speech, EU Commission president Ursula von der Leyen confirmed the European “Green Deal”, which provides for a 55% reduction in greenhouse gas emissions by 2030, among other goals. Von der Leyen also emphasised that the extremely dry summer of 2022 had illustrated the dramatic consequences of climate change. In the USA, a major climate package was approved at the start of August, with Washington looking to invest USDbn 369 in the fight against global warming and thereby drive the expansion in renewable energy sources, to mention one focus. The various examples show the immense economic implications that what is known as decarbonisation entails. By its nature, this herculean task on a global scale will not fail to have an impact on capital markets too. For investors, there are countless opportunities to profit from the enormous investment in climate protection.
At the same time, more and more investors are trying to reconcile achieving a reasonable market return with the requirements of sustainability and environmental protection. Among the pioneers in the field of responsible, future-oriented investment is Globalance Bank AG. Its founders brought SAM (Sustainable Asset Management), the world’s first asset manager for sustainable investment solutions, into being as long ago as 1995. In 2011, some three years after this group was sold, Globalance was launched. This bank’s core areas of expertise include business analysis that extends far beyond traditional financial key ratios. Globalance shows precisely the climate path that a portfolio is on and what footprint it leaves in the real world. This expertise is now being brought to bear in the Globalance Low Carbon Index. The new globally diversified benchmark is geared to the Paris Climate Agreement, so it focuses on companies which are in harmony with the 2-degree target and also achieve a good sustainability score.
