Skip to main content Skip to site footer

You are using an outdated browser. Please upgrade your browser to improve your experience.

Responsible spotlight - November 2022

10 months ago
Roundel Responsible Spotlight

COP27: breakthrough on compensation; frustration on emissions

Fraught negotiations at the COP27 in Egypt produced a landmark deal. This should see vulnerable countries compensated for the acute damage caused by climate change. Under the new framework agreement, richer countries will pay into a “loss and damage” fund, which poorer countries suffering some of the worst effects of climate change will be able to draw on. This could help tiny islands where rising sea levels pose an existential threat or countries facing more severe weather events.

Who pays?

It is hoped the new fund will be launched during 2023. Key details are still to be agreed, including who precisely foots the bill and which countries are defined as vulnerable. A critical point of contention is that developed countries want China, currently the world’s biggest carbon polluter, to pay into the fund.

No fossil fuel ban

Despite this landmark agreement, many will remember COP27 for its lack of progress on fighting the causes of global warming. India pushed a plan to end the use of all fossil fuels, but this was blocked by strong opposition from oil producers such as Saudi Arabia and Russia. 

Keeping 1.5°C alive

Scientists warned that the world is currently significantly behind where it needs to be, if the goal of limiting global warming to no more than 1.5°C is to be reached. It would require a 45% cut to emissions before 2030, in order to reach net zero emissions by 2050. The can has been kicked down the road to COP28 in Dubai next year. And nations might have to commit to more ambitious reductions in emissions if the 1.5°C target of the Paris Agreement is to be kept alive.

Roundel 1

Architas view

The emphasis of this year’s COP27 communiqué was more focused on remedying past damage, than on solutions to limit future damage. Nonetheless, it’s a good sign that developed countries appear increasingly willing to show solidarity with their developing counterparts on climate matters. Exactly who will be eligible to receive the funding, who will contribute and how much are vital questions. But there is hope that we could see more cooperation between richer and poorer countries in the years ahead, in a bid to combat global warming.

Latest investment news

Re-globalisation: what’s the big story?

Article | Investments | 03/10/2023

The last few years, marked by the global pandemic and geopolitical tensions, have brought a period of de-globalisation of world trade. However, despite disruption to the established trading order, with its extended supply chains, new patterns of trade continue to emerge.

Monthly Review - September 2023

Article | Investments | 03/10/2023

Markets contemplated a milestone moment, as western central banks appeared to hit the ‘high for long’ pause in their hiking cycle. The US Federal Reserve (Fed) and the Bank of England left rates on hold, a week after the European Central Bank (ECB) raised rates, possibly for the last time this cycle.

The View - asset allocation update

Article | Investments | 18/09/2023

August brought the usual pause in both central bank meetings and interest rate decisions. However, the month ended with the Jackson Hole summit for global central bankers.

We use cookies to give you the best possible experience of our website. If you continue, we'll assume you are happy for your web browser to receive all cookies from our website. See our cookie policy for more information on cookies and how to manage them.