Tackling climate change is on us

By David Penney

As the final I’s are sotted and t’s crossed at the COP26 Climate Conference, it is hard to know whether this is a decisive moment in the fight against climate change or another exercise in can kicking that will be revisited in six years time.

There were certainly lots of important announcements aimed at providing succour to the global community that our world leaders are committed to tackling the greatest threat to humanity in a millenia.

We saw governments around the world commit to saving 85 per cent of the world’s forests – around 13 million square miles - by the end of the decade or ending the great chainsaw massacre as it was described by our Prime Minister.

There was an important commitment to reduce methane emissions by 30 per cent by 2030 but the pledge was signed by just half of the world’s top 30 emitters with China, Russia, India and Australia keeping their pens firmly in their pockets.

The US came back to the table after four years of apparent apathy to the climate cause and recommit to the 1.5 degree aspiration first agreed at the Paris conference six years ago.

However, there was little or no reference to its military machine that emits more greenhouse gases than 100 countries combined and the President’s 85-vehicle entourage did little to encourage confidence that the US’s commitment is absolute.

We also had Amazon founder Jeff Bezos commit £1.47 billion towards land reclamation in Africa which should go some way towards offsetting the carbon emissions from his recent jaunt into space. 

In the final seven page draft agreement, countries have been given until the end of next year to submit their long term plans to reach net zero and phase out coal and fossil fuel subsidies although again the agreement contains no firm dates or targets on this issue. 

For me, the great takeaway from the conference was that for all the worthy words from our elected leaders, it is becoming increasingly clear that when it comes to tackling the polluters, the mega carbon emitters and the environmentally profligate, there is a far greater power than any government and that power is us. 

It was Ronald Reagan who said that “Government is not the solution to our problem. Government is the problem” and I think when it comes to the challenges of saving the planet, the 40th President of the United States had a point.

The reality is that in our democracies, the primary aim of any government is to retain power and that is not always conducive to making those big transformational decisions, balancing as they are the court of public opinion.  

Relying on our governments to solve the problems of the climate emergency not only absolves us all of our own responsibilities in this fight but also underestimates the individual power that we all have to make a difference.

One of the strange facts that was doing the rounds at the COP26 conference, which stemmed from the local eateries labeling the carbon footprint of each dish on their menus, was that a croissant has a larger carbon footprint than a bacon sandwich.

Now I’m not sure how this was worked out but my guess it has something to do with all the butter in a croissant, but it did reinforce the inalienable fact that as consumers, we have choices that we can make every day that collectively will make a massive difference in the fight against climate change.

The bottom line is that for all the governmental targets and mandates, it is money that will be the deciding factor in whether we are going to restrict the rise in the earth’s temperature to 1.5 degrees. 

While governments dance on a pin head and try and marry the competing demands of their difference constituencies, we are not encumbered by such considerations.

How we decide to use our own money is the most powerful tool at our disposal in the fight against climate change and it has the potential to be transformational.

Ensuring that we vote with our feet and only engage with businesses that share our sustainable values is the first step that we should all be taking but we can go much further by embracing the opportunities in responsible investing.

The majority of us are investors – some more overt than others but anybody with a pension scheme is a defacto investor, which means you have an important voice in how that money is invested.

Research by Nordea found that investing your pension responsibly can have 27 times more impact on your personal carbon footprint than flying less, taking shorter showers, eating less red meat and taking the train rather than the car combined. 

The reality is that responsible investing really is your most powerful weapon against climate change.

As part of the St. James’s Place Wealth Management family we are fortunate to be part of an organisation that understands the prize and has been proactively committing to a more sustainable portfolio. 

The company currently has £140bn funds under management managed by 40 fund managers, allowing us to hold the businesses we invest in to account. In turn the companies they engage with amounts to £60 trillion on the global markets, influencing them in turn to behave more responsibly. 

Governments come and go and only time will tell whether the commitments made in Glasgow will have the desired affect but if we really want to make a difference as individuals then understanding how our money is invested is potentially the most important step we can take today – and of course eating more bacon sandwiches.  

The Partner Practice is an Appointed Representative of and represents only St. James's Place Wealth Management plc (which is authorised and regulated by the Financial Conduct Authority) for the purpose of advising solely on the group's wealth management products and services, more details of which are set out on the group's website www.sjp.co.uk/products The 'St. James's Place Partnership' and the title 'Partner' are marketing terms used to describe St. James's Place representatives.

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