What happened at COP26 and what does it mean for pension scheme investments?

COP26 drew to a close on Saturday 13th November, a day later than scheduled, as delegates from 197 countries pushed to finalise a deal which aims to limit global warming and accelerate the shift of the world’s economies to a greener future. But what is in the deal, known as the ‘Glasgow Climate Pact’, and what does it mean for pension schemes?

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What was COP26 and what happened?

The 2015 Paris Agreement set the goal of limiting the global temperature rise to 2 degrees above pre-industrial levels whilst pursuing efforts to limit the increase to 1.5 degrees. COP26 had the purpose of agreeing and outlining the pledges to ensure the global temperature rise aligns to the Paris Agreement, often phrased by delegates as ‘keeping 1.5 degrees alive’. Below provides a brief overview of some of the key commitments and outcomes.

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In brief

• World leaders met in Glasgow at COP26 and agreed a range of pledges which aim to limit global temperature rises.
• Ultimately, the pledges do not go far enough and more action is required to tackle climate change. However, material change is still expected given the increased attention and focus as a result of the conference.
• Schemes must consider the long-term viability of their investments and be proactive as new investment opportunities arise.

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