Franklin Templeton Outlines Key Issues To Be Tackled At COP28

Amanda Cheesley Deputy Editor December 1, 2023

Franklin Templeton Outlines Key Issues To Be Tackled At COP28

As the United Nations Climate Change Conference starts in Dubai this week, with an early breakthrough made on the climate disaster fund, Craig Cameron, portfolio manager of the Templeton Global Climate Change Fund, outlines five themes to be tackled at COP28, focusing on renewables.

After the 28th edition of COP began in Dubai this week, Craig Cameron at US-based investment manager Franklin Templeton thinks the event offers the first test of the 2015 Paris Agreement’s influence on government actions on tackling climate change.

The first-ever Global Stocktake – a progress report of sorts for member countries’ climate policies – has been published to coincide with this year’s COP. “The grades are woeful, showing that current policies and actions fall well short of what is needed to align 2030 emissions with a 1.5C warming scenario,” Cameron said in a note. 

“While it is not groundbreaking news to know we’re not currently on track for the 1.5C target, the findings unveiled at COP28 can be leveraged to accelerate ambition in the next round of climate action,” he added.

At COP27 last year, an agreement was also made to establish a loss and damage fund to aid poorer countries cope with climate disasters. Progress on turning an agreement into action has been slow, but a breakthrough on this new fund was made at the start of the COP28 on Thursday which COP28 president, Sultan Ahmed Al-Jaber, said sent a positive signal for the talks. Nevertheless, some groups think it is too early to celebrate the fund’s early adoption, as there are still some unresolved issues.

The event, taking place at the end of a year in which the pursuit of Net Zero policies remains often politically controversial, has created an opportunity for wealth managers to work out how such issues should shape their asset allocation strategies.

Outlined below are five topics which Cameron wants addressed at COP28.

Urgency and ambition for both policy and action
The window for meaningful accordance with the Paris Agreement pathways is closing – we are now more than halfway between the agreement of 2015 and 2030, when many targets need to be achieved to remain on track. For emissions to track a 1.5C pathway, it is estimated that annual emissions need to fall around 43 per cent from 2019 levels by the end of the decade.

During COP28, UN member states will have the opportunity to respond to the findings of the first Global Stocktake, and Cameron hopes the severity of the report card plus the plan to reproduce this stocktake every five years, will be enough for the response to recognize the need for significantly more urgency, ambition, and cooperation from political leaders.

As investors seeking to invest in companies providing solutions which contribute to a reduction in emissions, he sees significant upside potential in many of these companies from more ambitious legislation and targets.    

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