This is our Live Aid,” a senior banker at Cop26 told me last week. “We get to go on stage and feel good about saving the world.” To be fair, unlike the world leaders in Glasgow last week, he hadn’t arrived at the summit in one of the 118 private jets and mile-long motorcades.
Perhaps this best explains that while the various heads of government waxed lyrical about their heartfelt desire to limit global temperature increases to 1.5 degrees — in line with the 2015 Paris agreement — they offered no convincing action plan to match their lofty rhetoric.
Of course, we’re used to this “say one thing, do another” form of government in Scotland. Our first minister’s contribution appeared limited to wandering the corridors, stalking world leaders and celebrities for selfies. Bearing in mind her government’s litany of missed green targets, from jobs to reducing emissions, not to mention the disgraceful state of our health service, her behaviour was eerily reminiscent of Lady Macbeth’s sleepwalking scene.
Meanwhile, the real work — well, the real PR work — was going on elsewhere.
It was fascinating to hear President Biden warn in his detail-free speech that climate change was “ravaging the world” and that the “eye of history” was on Glasgow. Biden has spent much of his first year in office trying (and so far failing) to persuade Opec to pump more oil in order to keep petrol prices down for US consumers. Politicians, eh?
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But is business any better? You don’t have to be Prince Charles to know that reducing global warming requires private sector support. But you don’t have to be Greta Thunberg to see that if we are truly to move away from “greenwashing”, we need to establish a standard to measure sustainability in the private sector. Otherwise, as UBS economist Paul Donovan put it last week, “spin will prevail over substance”.
The Science Based Targets initiative (SBTi), which certifies corporate climate policies, warned a “lack of consistent principles, definitions, metrics and evidence of effective strategies to meet the targets, limits the ability of financial institutions to support the reduction of emissions in the real economy”.
Much was made — mostly by Mark Carney, the living embodiment of Donovan’s pithy comment — of the US$130 trillion of global financial assets pledged, at some point in the future, to meet the goals of the Paris agreement.
More than one observer noted asset managers signed up to the Glasgow Financial Alliance for Net Zero (Gfanz ) had so far aligned just a third of total assets to future net zero targets. Despite Carney’s smiles, they will continue to invest in fossil fuels. Only last month, Larry Fink, chairman of US investment giant BlackRock confirmed his business had no plans to divest. He said: “We’re supportive of hydrocarbon companies, and believe they will be part of the solution of the green revolution of new green technology.”
When I asked him last week why he was continuing with this perfectly sensible strategy he (politely) declined to comment. Well, it would upset the Cop26 PR operation. Similarly, neither the chief executive of NatWest, Alison Rose, nor its chairman, Sir Howard Davies, would discuss the bank’s continuing fossil fuel investments. Well, Nat West is a headline sponsor of this jamboree.
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Moreover, the agreement will not cover many private equity firms, although pressure is increasing. And this perhaps is where mammon can produce something worthwhile. Finance is being driven towards sustainability by consumer, investor, and competition pressure. In short, money. Corporates will embrace sustainability at their own pace but ultimately they are better placed than governments to deliver meaningful change.
To do that, financial institutions should establish a robust, but practical criteria and timeline to reach net zero. Until that happens, all the speeches at Cop26 will, in Greta’s words represent the biggest financial greenwash in history. Or as Bob Geldof put it at Live Aid: “F*** the address, go to the numbers cos that’s how we’re gonna get it [the money].”
Scotland left out of the speeches
Meanwhile the great and the good of Scottish business gathered for the CBI’s Cop26 dinner. Keynote speaker was US climate envoy John Kerry, who gave a humorous, if overlong, speech. But the star of the show was New Zealand prime minister Jacinda Ardern who appeared via video. Ardern gave a clever and witty address which left diners laughing loudly. She lavished praise on the Kiwi-UK trade deal, which won’t go down well at Bute House. Indeed, Ardern, like other speakers, failed to mention the Scottish government once. Kerry did at least mention his middle name was Forbes, “like the finance secretary”, but this was very much a UK CBI affair.