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‘Point of no return’ as climate change crisis heats up

Emma-Lou Montgomery

Emma-Lou Montgomery - Fidelity Personal Investing

The environment will feature heavily in the next two weeks, both on a global and a national scale. As world leaders meet in Madrid for the 25th UN Conference of the Parties or COP25, back at home climate change has taken centre stage as the 2019 manifestos of Britain’s main political parties have made sure to flex their green muscles in the run-up to the general election on 12 December.

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It’s not an issue than anyone can ignore. In the past week alone the World Meteorological Organisation has announced that greenhouse gas concentrations reached their highest recorded level in 2018. Days later the UN Environment Programme showed there's a huge gap between the plans that governments currently have on the table to cut emissions and what's actually needed if we are to keep global warming under 1.5c.

When the UN Secretary General warned delegates ahead of the meeting that "the point of no return is no longer over the horizon", António Guterres was not seeking headlines, he was seeking headline changes from the world’s leaders.

All in all, a total of 29,000 attendees are set to travel to the conference over the two weeks of talks. And the talk will be all about not just what needs to done, but how it will be done. While dozens of countries, including the UK, have pledged net zero emissions by 2050, few have policies in place to ensure those promises are met.

The challenge is on to find agreement over a global carbon offset market, and to convince signatories to the Paris pact to submit bolder climate goals in 2020. And the hope is that the Madrid conference will concentrate the minds of international diplomats on the scale - and the immediacy - of the challenge.

Two big reports due to be published imminently and which coincide with the fortnight of talks, are the World Health Organisation’s findings on global health and climate change, which will provide data on the progress, or rather lack of, in more than 100 countries. This will be followed on Wednesday by an EU environment agency release, which will show how the bloc is faring on targets for biodiversity protection, climate change and greenhouse gas emissions.

Closer to home, Labour has threatened to de-list FTSE 100 companies that fail to address climate change, while the Conservatives have pledged hundreds of millions of pounds to help energy-guzzling industries find alternatives that will reduce their carbon footprint. And the Lib Dems have a wide green agenda, from renewables to all new cars going electric within the next decade.

As has increasingly been the case, green issues have become a priority for companies and their investors too. Sustainable returns have long been on the agenda for both, but now that phrase has taken on even more meaning.

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