World leaders are now gathered in Glasgow, Scotland for COP26 and optimism is already waning for a meaningful outcome. Many of these leaders wrapped up the G20 summit Sunday night without setting particularly high expectations for COP26. Reuters reported that “days of tough negotiation among diplomats [at G20] leaves huge work to be done at the broader United Nations COP26 climate summit.” While a general commitment to end coal financing was achieved, the final outcome “lacked firm pledges and failed to put an end date on the actual use of coal”. Former Bank of England governor Mark Carney warned that “companies failing to set out credible decarbonisation plans will find it harder to gain access to funding,” seemingly ignoring private equity’s appetite for fossil fuel risk-return.

The next twelve days, just like the preceding two months, will be filled with a great deal of rhetoric and political positioning that are likely to be more aspirational than actionable. During that time, we will be monitoring what happens – focusing on practical developments that may shape company actions in the near and mid-term, as well as significant issues that may have longer term but direct impacts.

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