The final COP26 pact sounds “the death knell” for coal despite a last-minute backtrack on wording, insists Boris Johnson, as asset managers committed to net zero fall far short on climate targets set by scientists. Meanwhile, a pioneering community investment scheme aims to raise £1 million to tackle the climate crisis in London’s Islington, Scottish Widows commits to invest up to £25 billion by 2025 in companies that are proactively tackling climate change, and Path Financial launches a Climate Solutions Portfolio for investors wanting to tackle the climate crisis with their pensions and investments. It’s the Good With Money weekly news brief.
COP26 pact is “death knell” for coal, says Prime Minister
Boris Johnson has insisted that the final pact made at the COP26 climate summit sounds a “death knell” for coal – despite a last-minute watering down of the deal.
The prime minister dismissed criticism over the dramatic change to the agreement, forced by India and China, that meant the commitment was to “phase down” rather than “phase out” coal power.
He said: “Whether the language is ‘phase down’ or ‘phase out’ doesn’t seem to me, as a speaker of English, to make that much of a difference – the direction of travel is pretty much the same.”
But while he welcomed the outcome of the Cop26 conference, describing the agreement as “game-changing,” he admitted that his own feelings at the end of the summit were “tinged with disappointment”.
Net zero asset managers fall short of climate targets
Asset managers who have committed to net zero carbon emissions are falling short of climate targets set by scientists, new analysis shows.
Firms in the Net Zero Asset Managers initiative, which have recently disclosed interim portfolio decarbonisation targets, are currently on track to cut their CO2 footprint by just 20 per cent this decade, according to environmental think tank Universal Owner.
That’s far below the 50 per cent identified by scientists as critical to reaching a mid-century goal of full carbon neutrality, and to stop temperatures rising more than 1.5 degrees celsius.
The asset manager group, part of the Glasgow Financial Alliance for Net Zero, represents a total of $57 trillion (£42 trillion) in investment funds. Members include some of the biggest financial firms in the world such as BlackRock, Vanguard Group, and State Street Corp.
London borough launches community climate investment
A pioneering new community investment scheme aims to raise £1 million to tackle the climate crisis in London’s Islington.
The Islington Greener Futures: Community Municipal Investment (CMI) is offering a fixed tax-free return of 1.55 per cent annually to investors.
So far around £450,000 has been channelled into the scheme, which aims to “help create a greener future”. CMIs allow local authorities to issue a bond through a crowdfunding platform, and Islington plans to use the money raised to support low-carbon projects.
The council has teamed up with Good With Money ‘Good Egg’ company Abundance Investment to launch the scheme, which is the first of its kind in the UK. Minimum investment in the CMI, which can be held in a tax-free Innovative Finance ISA, is £5. Interest is paid twice a year and the original capital is returned after five years.
Scottish Widows to invest up to £25 billion in climate-friendly firms
UK pensions provider Scottish Widows is to invest up to £25 billion by 2025 in companies that are proactively tackling climate change.
The new pledge includes investing at least £1 billion in firms developing climate solutions, such as alternative green energy, sustainable agriculture, and pollution prevention.
The company, which has more than six million pension customers, has already targeted halving the carbon footprint of its investment portfolios by 2030, and aims to reach net zero across all its investments by 2050.
Maria Nazarova-Doyle, Head of Pension Investments and Responsible Investments, said: “We’re announcing another major milestone in our journey to net zero by committing to invest at least £20 – £25 billion by 2025, in companies that are pro-actively adapting their businesses to be less carbon-intensive or are developing climate solutions.
“At least £1 billion of that figure will be invested to fund companies developing new, sustainable ways of living and working. This huge new investment starts today and will accelerate and grow rapidly over the next four years.”
Financial advisor firm launches ‘Climate Solutions Portfolio’ in UK first
Path Financial – the UK’s first and only national financial advisory firm set up in response to the climate crisis – has launched a Climate Solutions Portfolio for investors wanting to tackle the climate crisis with their pensions and investments.
Founder David Macdonald said: “We were already offering impact investing aligned to UN Sustainable Development Goals (SDGs).. We are now innovating even further in response to customer demand and are creating what we believe is a first for the UK and what will also prove to be the future of UK pensions and investments if we are going to reach net zero goals.”