The United Nations’ climate conference COP27 is underway in Egypt from 6-18 November. Lisa Sizeland in Schroders’ global content team has summarised what COP27 is and why it matters in this Q&A. You can also read our COP27 jargon-buster, a quick guide to common terms, here.

Bookmark this page to stay up-to-date with developments and Schroders' views.

18 November: How will COP27 impact emissions trajectories?

As we await the final announcement, Irene Lauro, Environmental Economist, gives her verdict. She says: “While COP27 negotiations are not likely to have a meaningful impact on future emissions trajectories (ie on emissions reductions), there have been some other developments outside the climate summit that maintain positive momentum on climate action.

“In particular, at the G20 meeting in Indonesia the US and China, the two largest emitters of greenhouse gases, agreed to resume talks on climate and work together to address climate change. China decided to suspend talks with the US after house speaker Nancy Pelosi visited Taiwan in August. G20 leaders also agreed to keep the 1.5 target alive, deciding to make more efforts to fight global warming.

“Another important agreement reached in Bali was also the Just Energy Transition Partnership (JETP) for Indonesia, that will mobilise $20 billion over the next three to five years to reduce the country’s reliance on coal, while supporting its renewable energy generation.”

15 November: From amplification of indigenous community voices to female representation – a first-hand account

In this first-hand account from Maria Teresa Zappia, Deputy CEO at BlueOrchard and Head of Sustainability and Impact at Schroders Capital, published today, she touches on:

• Some of the most talked-about topics, including the “loss and damage” issue and development finance;
• The importance of listening to, and protecting the rights of, indigenous communities;
• The human side of COP27 and diversity challenges.

“As I started my journey home  from Sharm El Sheikh, I reflected on my few days at COP27, the people I met and the stories I heard. One particular thing that struck me was how different the challenges facing many emerging and frontier markets are compared to more developed economies when it comes to the climate crisis,” she writes.

Watch out for the next episode of The Investor Download podcast from Schroders as we get closer towards the end of COP27, in which Maria Teresa Zappia and Holly Turner, Climate Specialist at Schroders Capital, will discuss what’s been achieved and what needs to be done to get us off a “highway to climate hell”.

14 November: what to make of COP27 so far?

Holly Turner, Climate Specialist at Schroders Capital, says: “Statements like ‘highway to hell’ from the first week epitomise the level of emotion these COPs give rise to, but with COP27 more than halfway through, this week will bring more clarity on what the actual outcomes of this COP could be.

“COP27 is considered an implementation year, with the focus being the initiatives and announcements from the ‘Green Zone’ (open to the public) as much as the ongoing negotiations of the ‘Blue Zone’ (where formal minister negotiations take place).

“Aspects I have been following myself include the UK Transition Plan Taskforce’s disclosure and implementation guide; the launch of the African Carbon Market Initiative; backing of CDP, the not-for-profit carbon disclosure project, by the White House; the Food and Agriculture for Sustainable Transformation (FAST) initiative; and the Network for the Greening the Financial System initiative.”

12 November: Doubling of funding for agriculture innovation

Saturday brought a day focused on agriculture and adaptation at COP27. This is the first time there has been a dedicated agriculture day at COP.

Felix Odey, a fund manager specialising in sustainable food & water and the energy transition, said: “One notable outcome of the day was that the funding commitment for the Agriculture Innovation Mission for Climate increased from $4 billion to $8 billion.

"The funding is focused on investing in innovative technologies and processes that are in their early stages, with the aim of scaling these through to 2025. The funding is provided primarily by the US and UAE, although capital also comes from other nations and the private sector.”  

Agriculture is severely affected by the changing climate but is also a major producer of harmful emissions.

Read more here: Infographic: how can we tackle the food and water crisis?

“Riding out the multicrisis” at the Paris Peace Forum – Andy Howard on COP15 and biodiversity

At the same time as COP27 taking place, the Paris Peace Forum, in its fifth consecutive year, saw global governance representatives gather for an event focused on “preventing a destructive world polarisation that would jeopardise many critical challenges for humanity” on Saturday.

Schroders’ Global Head of Sustainable Investment, Andy Howard, spoke as part of a panel on “What contributions can companies make to COP15 on biodiversity?” (a replay is available on YouTube here).

COP15 is the 15^th Conference of the Parties to the United Nations Convention on Biological Diversity and will take place from 7-19 December in Montreal, Canada. It will be the biggest biodiversity conference in a decade.

Schroders published a Plan for Nature earlier this month on 2 November, outlining an ambition to channel investment into this area and support the transition to a nature positive future.

• Read more about Schroders’ Plan for Nature at this dedicated website

Looking ahead to COP15, the UN biodiversity summit taking place in Canada this December, Andy was asked why an investment manager like Schroders would announce a Plan for Nature.

He said: “There’s been huge amounts of focus on climate change, quite rightly, over the last few years, but I see it as symptomatic of a bigger challenge – and that bigger challenge is really the inevitable conflict from growing demand on the world’s finite resources and finite resources.

“The natural environment is well past the point of being in credit, we’re in a deficit and that deficit is getting bigger. That creates risks, that creates opportunities, but fundamentally it requires us in the finance industry to think differently about what our role is.

“Across a whole range of areas, fundamentally the asset management industry is about connecting capital to areas of need and there are few greater areas of need than the need to invest in and support the natural environment.

“For us this is a critical question at an almost philosophical level – and it’s about how we think about the way we manage companies, the way we engage companies, the way we allocate capital. I won’t pretend we have all of the answers, we absolutely don’t, but I think thinking differently about the questions in today’s environment for us is not really a choice, it’s the way we have to run our business and how we have to behave as investors.”

10 November: Do cities hold the key to combating climate change?

Tomorrow, Friday 11 November, will be Decarbonisation Day at COP27. Among other sessions, there will be a fringe event looking at the role of cities and the real estate sector in decarbonisation.

Tom Walker, a portfolio manager specialising in real estate and global cities, said: “With real estate contributing 40% of all global carbon dioxide emissions, the sector must take a leading role in decarbonisation. I see reasons to be positive. Net zero carbon construction is now a reality for developers that want to take advantage of the technology. In addition, the operation of buildings is becoming more efficient and a number of real estate companies have a clear path to net zero. I continue to think the solution to climate change resides in cities”.

10 November: Schroders TV: How on Earth do you invest in nature without greenwashing?

“You don’t have a choice whether your investments are exposed to nature or not.” As nature is destroyed and species are being wiped out, the world is racing to find solutions. This Schroders TV episode looks at how investors can unpick the blurred lines of solutions like carbon capture and carbon avoidance, all while avoiding greenwashing.

8 November: Reflections from COP27 

Commenting from COP27, Maria Teresa Zappia said: “Yesterday I sat in on two panels whose basic messages were very striking. One covered finance for youth and the second involved indigenous peoples. In both discussions there was one word that came up again and again, and this word was ‘respect’.

“Both groups participating in COP27 kept saying that that’s where it all starts, with respect for being young or being different or being ethnically a minority. And they said if there is no respect there is very little that can be done on the climate front. Then if we look closely at the leaders in this world, you can see that indeed there is a need for more diversity and more respect, because the people at the base of the pyramid really need to be at the centre of the matter.

“So I guess if there is a word from COP27 day two, for me it is respect, and this is particularly important in the context of emerging and frontier markets where unless you make an effort to understand these countries, their cultures, and their values, bridges will be difficult to build.

“Another topic that was at the centre of many meetings was the mobilisation of capital. Clearly the private sector needs to step in but the public sector has a huge role to play in facilitating the private sector’s activity in climate finance.”

8 November: Why climate investors need to prioritise those who are affected most

Maria Teresa Zappia, who's currently at COP27, explains why the "just transition" to a green economy must put people at its centre. She is well aware that it is people in emerging and frontier economies who are set to feel the most pain from climate change.

She said: “If we are to achieve a just transition to a lower carbon, more resource-efficient and more socially inclusive economy, governments and businesses need to take more action to realise their commitments.”

Not only do we need to build a green economy, but we need to put people and human rights at the centre, she argues, and make sure “people who are most impacted by climate change are equipped to protect themselves”.

7 November: What’s the point of COP27?

The world has already warmed to around 1.1 degrees Celsius above pre-industrial times. So, are the COP climate summits working?

Maria Teresa Zappia and Holly Turner have argued COP26 has revealed an urgent need to move away from five-year cycles. Countries are required to update their decarbonisation plans, known as nationally-determined contributions (NDCs), every five years. 

But “the urgency to have yearly action-driven COPs comes from the increased realisation that just half a degree difference between 1.5C and 2C unleashes a far more severe version of climate change and its effects,” they said, citing warnings from the Intergovernmental Panel on Climate Change (IPCC).

Read more from Schroders on the IPCC reports:  

• “An atlas of human suffering”: IPCC climate change update
• “Now or never” for climate change mitigation, IPCC warns
• Does the IPCC report change anything?

7 November: “We are on a highway to climate hell”

UN Secretary General Antonio Guterres gave a stark warning at the COP27 conference on Monday, telling delegates from almost 200 countries: “We are on a highway to climate hell with our foot on the accelerator”. He said: “We are in the fight of our lives, and we are losing. Greenhouse gas emissions keep growing, global temperatures keep rising, and our planet is fast approaching tipping points that will make climate chaos irreversible.”

Schroders’ Lazaro Tiant, Sustainability Investment Director, told Reuters for this article: “COP26 was met with excitement and potential to solidify climate commitments and act as a launching pad of progress towards global action. Since then we have seen examples of crucial policy moving forward, such as the Inflation Reduction Act in the US.

“However, societies and markets continue to struggle with the consequences of the Russia/Ukraine war and inflation, highlighting a costly environment for developing countries in addition to vulnerabilities to energy insecurity. This political backdrop makes major developments at COP27 less likely.

“COP26 focused heavily on climate mitigation and the reduction of greenhouse gas emissions, yet we are still far away from global carbon prices and the deployment of new technologies in both developed and developing markets.

“A top priority of COP27 is to boost global efforts on climate adaptation which shifts the focus to the response needed to increase resilience against climatic changes.

“In this context, developing countries are up against challenges of pursuing climate goals while trying to limit the impact on jobs, energy security and inflation. Addressing the topic of a just transition will be essential to ensure that the consideration of local communities becomes part of the focus.”

6 November: COP27 gets off to a delayed start

The opening of COP27 means the UK has handed presidency of the talks to Egypt. After discussion on the agenda – and in particular whether to include “loss and damage” funding – delayed its opening, the UN Climate Change Executive Secretary Simon Stiell gave his opening remarks.

He urged delegates to focus on “three critical lines of action”:

• a “transformational shift to implementation”;
• cementing progress on “these critical workstreams – mitigation, adaptation, finance and crucially – loss and damage”;
• and “delivery of the principles of transparency and accountability throughout our process”.

Sameh Shoukry, president of COP27, said: “We are delighted to have, for the first time, an agenda item on loss and damage, recognised as a very controversial issue that has to be addressed with transparency and dedication.”

Schroders’ Global Head of Sustainable Investment Andy Howard told Financial News for this article: “Every COP is important. We are coming into this one in a different environment, but also against a backdrop of meeting the goals and commitments laid out in terms of governments’ commitments to driving long-term change in their economies. Long-term ambition needs tangible policy action that will have a meaningful impact. We will need to see more action on that front.”

2 November: Why we need to prioritise nature alongside the climate transition

Schroders has published its Plan for Nature today. The Plan outlines Schroders’ ambition to channel investment into this key area and support the transition to a nature positive future. Nature risk is increasingly recognised as an integral factor to business risk, with more than half of global GDP believed to be dependent on the natural world. Furthermore, new research suggests unpriced nature and climate risk could wipe billions off the world’s food and agriculture companies.

Peter Harrison, Group Chief Executive at Schroders, said: “In order to continue to deliver robust long-term returns, it’s critical we mitigate the nature risk embedded in portfolios. We want to harness the power of investment to accelerate a nature positive future.”

Meanwhile Nigel Topping, UN Climate Change High-Level Champion for COP26, said:“We urgently need to put the world on a path to end deforestation by 2025 and reverse nature loss this decade. Put simply, this is not an option but a strategic necessity to deliver on net zero plans. Investors can play a leadership role, and at the same time protect themselves against risk in their portfolios and unlock new growth opportunities. Actions like Schroders’ Plan for Nature send an important signal to businesses and governments to step up action and adopt ambitious policies that will support the restoration and conservation of nature.”

• Read more about Schroders’ Plan for Nature at this dedicated webpage

2 November 2022: What does it take to be a climate leader?

Tackling climate change isn't just the responsibility of governments or individuals - companies have a crucial role to play too. In this podcast, Simon Webber and Isabella Hervey-Bathurst, both of whom are portfolio managers specialising in climate change, discuss how companies can contribute to reaching climate targets and why this is important for investors. 

The Investor Download podcast is available wherever you get your podcasts. New shows drop every Thursday at 5pm UK time.

27 October: Can COP27 help close the emissions gap?

With just over a week to go until COP27 begins in Sharm El Sheikh, a UN report has highlighted that much more needs to be done to cut harmful emissions. The UN's Emissions Gap Report 2022 said "the international community is falling far short of the Paris goals, with no credible pathway to 1.5°C in place." 

Ahead of the forthcoming climate conference, several of our experts have outlined their expectations. Read their views in full here: Investor expectations for COP27

Yumna Yusuf, Engagement Associate – Climate, said: “Unlike previous COPs, which have focused heavily on climate mitigation, a key priority of the COP27 Presidency is to ramp up global efforts on adaptation and resilience and place this at the forefront of the climate action agenda.

However, there are doubts that COP27 will make significant progress. Andy Howard, Global Head of Sustainable Investment, said: “In practice, I am not expecting huge things from COP27. It seems very improbable that major steps forward or statements of intent will be announced in the current political context.”

24 October: What will be on the agenda at COP27?

With two weeks to go until COP27 gets under way in Egypt, Schroders’ Environmental Economist Irene Lauro looks at what’s likely to be discussed. Issues such as adaptation, climate finance, and loss and damage are high on the agenda. Read her full article here: An environmental economist's take on COP27

Irene said: “COP27 has been framed as an implementation summit. This means COP conversations are not likely to be centred around new mitigation measures to reduce emissions, but rather on how to implement climate actions in order to fully operationalise the Paris Agreement.

“Adaptation, how to prepare for the increasing impacts of a changing climate, is a key issue, especially for developing countries. Meanwhile, António Guterres, UN Secretary-General, highlighted in a recent speech to world leaders that a successful COP27 outcome has to include a financing facility for loss and damage.”

16 August: Biden signs landmark US climate bill: the Inflation Reduction Act 

US President Joe Biden has called the Act, which could slash US emissions by 40%, the “largest investment ever in combatting the existential crisis of climate change. In this article – Inflation Reduction Act explained: the most important climate bill in US history? – Schroders’ climate specialists including fund manager Mark Lacey and Greencoat Capital’s David Boyce share their takes on the new legislation.

Of the $790 billion it is expected to raise, $369 billion is earmarked for energy and climate change priorities.

Analysis by the REPEAT Project, an energy policy evaluation group, suggests the Inflation Reduction Act could cut 2030 CO2 emissions by an extra gigaton (one billion metric tons). 

Climate change fund manager Isabella Hervey-Bathurst says: “This is enough to close two-thirds of the gap between what current policies, ie ’business as usual’, will achieve and where the US would need to be in 2030 to hit the target to cut emissions by 50% vs 2005.”

Alex Monk, a fund manager specialised in the energy transition, says: “The bill is clearly supportive for company earnings across various parts of the energy transition sector – such as solar, wind, storage, hydrogen, parts of the supply chain – and it can hopefully unlock some of the bottlenecks that have caused a lack of activity in certain parts of the market recently.”

26 July: just over 100 days to go until COP27

With just over 100 days to go until COP27, we are initiating this live blog to share the latest news and perspectives on the climate crisis around the world.

The annual Conference of the Parties is one of the world’s most important international events. It sees representatives from governments and other organisations gather to report on their country’s progress against the goals set out in the Paris Agreement and make new decisions on to how to reduce carbon emissions.

At the 2015 conference, countries were asked to make changes to keep global warming "well below" 2°C above pre-industrial levels – and to try to aim for 1.5°C.

Over the last few weeks of November 2021, all eyes were on Glasgow as global leaders, businesses and charities gathered for COP26, which was hosted by the UK.

As Simon Webber, a lead portfolio manager at Schroders who has invested in climate change trends for more than 15 years, said at the time: “Some conferences can be a formality, but COP26 is arguably the most important climate conference in a decade.”

Topics covered were wide-ranging. From developments in natural capital and carbon markets and the creation of the Natural Capital Investment Alliance to accelerate natural capital as a mainstream investment theme, to the phasing down of coal and commitments to end harmful deforestation.

We’ll be bringing you the latest climate news in the run-up to negotiations in Sharm El Sheikh. 

In a nutshell: COP26 recap

• COP26 was the fifth since Paris in 2015, which saw nearly 200 countries signing up to the Paris Agreement, the framework to avoid dangerous climate change by limiting global warming to well below 2°C and pursuing efforts to limit it to 1.5°C.
• Sir David Attenborough, the broadcaster and natural historian, kickstarted the event with a speech urging world leaders to turn “tragedy into triumph” as “People’s Advocate for COP26”.
• By the end of the conference, a new global commitment – the Glasgow Pact – was agreed.
• For the first time, an explicit plan to reduce use of coal, which is responsible for more than a third of emissions, was agreed.
• 100 individual country leaders came together, as well as a lot of companies, including Schroders, committing to ending deforestation – certainly commodity-based deforestation, which is deforestation related to farming primarily – by 2030.
• China and the US, the world’s biggest emitters, agreed to boost climate co-operation over the next decade.
• A request to double the amount of spending to around $40 billion annually to support developing countries was met. In particular to help enable them to mitigate or reduce the impacts of physical climate change – rising sea levels, increased weather damage – on their economies.
• A scheme to cut 30% of methane emissions by 2030 was agreed by more than 100 countries.

In a nutshell: COP27 and what’s next

• COP27 is set to take place from 6-18 November and will be the 27th COP since the first (COP1) in Berlin, Germany, in 1995.
• A detailed agenda has not yet been released, but you can read about the Egypt Goals and Vision on the Egypt Presidency website.
• After COP26, countries were asked to come back by this year’s conference to strengthen their 2030 commitments.
• Mahmoud Mohieldin, the UN climate change high-level champion for Egypt, has said the summit must focus on adapting to loss and damage from climate change.
• A commitment from 2009’s Copenhagen conference that developed countries would provide significant finance to support countries in the emerging world has still not fully materialised. A $100billion a year target has not been met.
• The “double counting” problem in carbon markets – whereby a country that’s creating an offset, for example through forestry, would count the benefit while the country buying the offset would also count the benefit – has still not been solved.
• There is still no global carbon price.
• The latest updates from the UN’s Intergovernmental Panel on Climate Change have been stark warnings on the impacts of climate change on people and the planet that are already materialising:

1: “An atlas of human suffering”: IPCC climate change update (released 28 February 2022)

2: Now or never for climate change mitigation, IPCC warns (released 4 April 2022)

A synthesis report is scheduled to be released in late 2022 or early 2023.

More from COP26:

Peter Harrison: two reasons for post-COP26 optimism

“A quiet revolution in environmental investment is underway. It will make a difference.” – Peter Harrison, Group Chief Executive

What does COP26 mean for climate change investors – and what next?

“COP26 wasn’t all about governments: on the private sector side we saw the formation of the Glasgow Financial Alliance for Net Zero (GFANZ) chaired by Mark Carney and Michael Bloomberg. This comprises $130 trillion of assets which are committed to net zero goals.” – Simon Webber, Lead Portfolio Manager

Andy Howard: COP26 success or unmitigated disaster?

“There were a number of individual areas – for example around deforestation and around carbon markets – which moved forward. But in some ways the headline ambition of COP, which was really to ratchet up the levels of ambition of individual countries, has been somewhat deferred through to next year and next year’s COP in Egypt.” – Andy Howard, Global Head of Sustainable Investment

Watch Dame Elizabeth Corley, Schroders Chair, speak about the role of the private sector at COP26

Dame Elizabeth Corley, also chair of the Impact Investing Institute, set out Schroders’ commitment to investing in natural capital as part of an influential speaking slot at the COP26 Leaders event: Action on Forest and Land-use on 2 November 2021.

“It’s our ambition to scale this. It’s also to catalyse change, to improve the way we can finance projects, start early-stage innovation and to help others in a way that means we are doing absolutely the right thing for people and the planet and to also deliver a financial return for everyone who saves money with us.”

COP26: a quick guide to common terms

“The just transition is both a goal and a requirement: global agreement across policymakers representing every part of the global economy will not be possible unless all consider the plan fair.” – Andy Howard, Global Head of Sustainable Investment

How can investors ensure a “just transition” in climate change fight?

“A dollar invested in emerging and frontier markets can do more for the climate emergency than one invested in developed markets, but we must ensure plans are fair to all.” – Maria Teresa Zappia, Head of Sustainability and Impact at Schroders Capital

An investor’s guide to climate change: the simple and surprising facts

“The good news is that we are concerned enough for Greta Thunberg to be immediately recognisable around the world. The bad news is that we are not scared enough. Despite all the policy action in the last decades, greenhouse gas emissions are still increasing and the planet is still warming.” – Anastasia Petraki, Investment Director, Sustainability

Investor expectations for COP26

“A powerful way to incentivise businesses to decarbonise would be an agreed carbon price. This would charge emitters based on the amount released into the atmosphere, aiming to put the cost back to the source. Many countries already have some form of carbon pricing, but in order to be effective we would need universal adoption.” – Kate Rogers, Head of Sustainability, Wealth

More from Schroders on climate change