Between 31 October and 12 November 2021, climate leaders gathered in Glasgow for COP26, the most consequential convention on climate change since the Paris Agreement was reached in 2015.
A delegation of senior Macquarie leaders, led by Managing Director and Chief Executive Officer Shemara Wikramanayake, joined events and took part in a number of sessions throughout the two-week conference. On this page we bring you some of the highlights from on the ground.
|COP comes to a close, and attention turns to implementation|
|Macquarie's Green Investment Group at COP26|
|11 November - Cities, Regions and Built Environment Day|
|10 November - Transport Day|
|5 November – Week one draws to a close|
|4 November - Energy Day|
|3 November - Finance Day|
|2 November - World leaders' summit (day two)|
|1 November - World leaders' summit|
COP26 closed with a new global climate pact that confirmed nations’ commitment to the goals set out in the Paris Agreement and set the ambition to reduce global emissions by 45 per cent by 2030 against 1990 levels. Net zero targets now cover 89 per cent of global emissions compared to 54 per cent at the start of 2021, and countries have committed to increase their near-term goals in time for COP27 next year.
Glasgow also marks a turning point in the level of public-private partnership in addressing the climate change challenge. There was unprecedented engagement by the private sector in the run-up to and at COP26, with commitments from the energy, automotive, marine transport, aviation, cement, aluminium, steel and finance industry all helping galvanise ambition-raising efforts.
Attention now shifts to implementation, as the ambitions set in Glasgow will require a steep increase in the deployment of sustainable, climate-resilient infrastructure and deep partnerships between all stakeholders to enable the rapid and orderly transition to a low carbon economy.
Macquarie is committed to playing a leading role in supporting a broad range of clients to decarbonise, in developing and investing in sustainable infrastructure globally, to completing our first group-wide net zero plan, and publishing asset-level decarbonisation plans for our infrastructure portfolio.
We will also continue to champion the role of the financial sector in addressing the climate challenge through our involvement in leading climate initiatives, including the Glasgow Financial Alliance for Net Zero and the Climate Finance Leadership Initiative.
Adrian Barnes, Senior Manager in the Green Investment Group’s Green Impact Advisory team, spoke in Scotland’s Climate Ambition Zone on Finance Day on a BSI (British Standards Institution) panel discussing ‘How standards for sustainable finance can help integrate Net Zero / ESG considerations into investment decisions’. Adrian spoke about the interface between voluntary standards for sustainable finance and upcoming regulatory requirements, and how these should help drive investment decisions and therefore flows of capital to more sustainable outcomes. Insights from across the spectrum of sustainable finance – including policymakers’, regulators’ and institutional investors’ perspectives – were provided by fellow panellists Ivan McKee MSP (Scottish Minister for Business, Trade, Tourism and Enterprise), Peter Young (Chair of ISO Sustainable Finance committee), Kaisie Rayner (Climate Change Lead at Royal London), Yasmin Raza (Technical Specialist at the Financial Conduct Authority), and Ece Ozdemiroglu (Founder of Economics for the Environment).
Raphaelle Vallet, Senior Manager in the Green Investment Group, on Finance Day moderated a panel in the Australia Pavilion on the role of green banks and other types of financial institutions in mobilising private capital for the net zero transition. She was joined by Manish Chourasia (Managing Director of Tata Cleantech Capital Limited), Ian Learmonth (CEO of the Australian Clean Energy Finance Corporation), Craig Weise (Chief Executive of New Zealand Green Investment Finance), and Eilidh Mactaggart (CEO of the Scottish National Investment Bank). On Energy Day, Raphaelle joined a panel hosted and moderated by Rogger Harrabin, the BBC’s correspondent on climate and energy, in Scottish Power’s Glasgow headquarters, to discuss the role of financial institutions in financing the transition to clean energy and emerging challenges in energy market regulation. On Nature Day, Raphaelle presented to four US Senators, including Senator Tom Carper, Chair of the US Senate Committee on Environment and Public Works, and two US Mayors, on the opportunities and challenges of mobilising private capital into nature-based solutions.
Today at COP26, Macquarie took part in a series of sessions and discussions on advancing climate action across cities, regions, and the built environment.
Mary Nicholson, Head of Responsible Investment for Macquarie Asset Management, was a speaker at the COP26 Presidency Event, ‘Building Back Better: Accelerating deep collaboration for Built Environment climate action’. Mary spoke to the tangible steps for decarbonisation in infrastructure and real estate that Macquarie is exploring both independently within our portfolio companies and through collaboration with industry, peers, and government. Mary was joined on the panel by Eddie Hughes (UK Minister for Housing and Rough Sleeping), Inger Andersen (Under-Secretary General of the United Nations and Executive Director of the UN Environment Programme), Aaditya Thakarey (Cabinet Minister of Tourism and Environment Maharashtra Region, India), Sello Mphaga (Executive Director, City of Tshwane, South Africa), Steve Adler (Mayor of Austin, Texas), Lorena Dellagiovanna (Vice President and Executive Officer, Hitachi), and Neil Martin (CEO of Lendlease Europe) all showcasing examples of deep cross-sectoral collaborative action on climate mitigation and adaptation in the built environment.
Peter Durante, Head of Technology and Innovation for Macquarie Asset Management, joined the City of London Corporation and Green Finance Institute’s Green Horizon Summit@COP26 event, ‘Decarbonising transport, cities and the built environment: Delivering Net Zero cities’. He spoke about green innovation in the transport sector, including financing the transition to low-carbon fuels. Peter also spoke about the emerging technologies and the work that Macquarie is undertaking in our portfolio assets, with Chris Hayward, Sheriff, City of London Corporation
Peter, Mary and Ross Mumford, Head of Government Affairs EMEA, also attended multiple events in Glasgow with Macquarie Asset Management portfolio company, Cadent Gas, on how it is using hydrogen to decarbonise the UK’s gas grid, as well as high-profile events organised by the CBI (Confederation of British Industry), the UK’s largest business organisation.
Today is Transport Day at COP26, where the focus is likely to be on what mitigation measures can best stem the rising level of transport emissions globally5. With road transport the origin of the majority of those emissions, and those from road vehicles rising faster than those of any other transport method5, high up the agenda will likely be how to accelerate the shift to zero emission vehicles.
Electric vehicles (EVs), the most common type of emissions-free vehicle, have experienced a decade of rapid growth and the global electric car stock now stands at over 10 million; however, they still account for just 1 per cent of the cars on our roads.6 In an effort to debunk some of the common misconceptions about EVs and highlight the opportunities that lie ahead as the market for them continues to expand globally, Peter Durante, Head of Technology and Innovation at Macquarie Asset Management, used an EV to complete one of the longest road trips in Europe – from London to Sicily and back.
Watch the highlights and key takeaways from his trip here:
As the first week of COP26 draws to a close, there is a glimmer of hope that the commitments made in Glasgow, if followed through, could be enough help achieve emissions reduction in line with the ambitions set out in the Paris Agreement.
New climate finance mobilisation commitments played a central role in restoring good faith in the negotiations, with US Climate Envoy, John Kerry, announcing that the $US100 billion annual climate finance for developing nations target could be achieved next year, after Japan made increased budget commitments.
The progress made this week has been the result of commitments spanning a wide range of geographies and sectors - from halting deforestation and investing in renewable energy and electric vehicles, to phasing out coal power and committing to tackle methane emissions. Next week will set the stage for more sectoral commitments from industries, including steel, aviation and shipping.
Today, the focus for the Macquarie team shifted from Glasgow to Edinburgh, with a series of meetings at the offices of Macquarie’s Green Investment Group (GIG) at the foot of Edinburgh Castle. Among the day’s sessions was one with Scottish and Irish offshore wind leaders to discuss pathways to project realisation in both countries. GIG and its partners are developing a new offshore wind project in the west of Orkney area and are studying the potential to connect this to a new green hydrogen production capability. GIG is also developing a pioneering new project off Ireland’s Atlantic coast.
The team also met with Scotland’s Cabinet Secretary for Finance and the Economy, and the new Scottish National Investment Bank to discuss their ambitions to provide patient, long-term capital to businesses and projects throughout Scotland.
With COP26 moving into its second week, the Macquarie delegation will continue to support events and activities in Glasgow. We will share our insights and perspectives on driving climate solutions on this page and you can also follow our activity on the Macquarie and GIG social media channels.
To facilitate the transition to net zero, the world needs practical climate solutions. In playing our part, Macquarie is focused on investing in green businesses, developing green energy projects and supporting our clients and communities to decarbonise. Watch to see what we have done in the past three months (August to October 2021).
On Energy Day at COP26, a coalition of at least 23 countries and dozens of private sector institutions announced that they would phase out coal-fired power generation by 2030 in developed countries, and 2040 in developing countries. The new coalition includes countries like Poland, Ukraine, Canada and Vietnam, which still extensively rely on coal as part of their energy mix.
Leaders of the world's biggest economies had already agreed to end international financing for coal projects at last month’s G20 meeting in Rome. The United States and Canada have now gone further at COP26 and committed to stop providing public finance to all fossil fuels by the end of 2022, unless the facilities that use them are equipped with carbon capture and storage.
Today, Macquarie’s delegation included Nick O’Kane, Head of Commodities and Global Markets; Leigh Harrison, Head of Real Assets, Macquarie Asset Management; and Mark Dooley, Global Head of Macquarie's Green Investment Group.
As the first week of COP draws to a close, updated analysis from The International Energy Agency (IEA) has found that the climate pledges announced to date – including those made so far at COP26 – if met in full and on time, would be enough to hold the rise in global temperatures to 1.8C by 2100. It’s the first time the IEA’s analysis has concluded that governments have come forward with targets of sufficient ambition to hold global warming to below 2C.
In remarks at the Australian Government’s Technology to Zero Summit the last month, Kate Vidgen, Head of Industrial Transition and Clean Fuels for Macquarie’s Green Investment Group, shared her perspective on how the significant amount of capital available for investment, the coalescing of communities, businesses and markets, and the speed of technological development are coming together to drive the green energy transition.
Today was Finance Day at COP26, setting the stage for some of the most anticipated discussions and announcements of this year’s conference. Mobilising capital is a key challenge in the transition to net zero, which is expected to require investment of $US100 trillion by 2050.3 Throughout the day, a key priority was the sustainable infrastructure investment gap in emerging markets and developing economies - estimated to require more than $US1 trillion of investment each year by 20304, a seven-fold increase in current investment levels.
Kicking off the day, Rishi Sunak, UK Chancellor of the Exchequer, announced that the City of London would become the world’s first net zero finance centre, and that the UK Government plans to set out new rules requiring public companies to report on their plans to achieve net zero emissions.
The Macquarie delegation met with Rishi Sunak to discuss COP26 and Macquarie’s role in supporting the UK’s Ten Point Plan for a Green Industrial Revolution.
Macquarie Group Managing Director and CEO Shemara Wikramanayake attended a breakfast discussion on the role of private finance in the race to net zero with the Ministers of Finance from countries including the UK, Canada, Italy and Indonesia, and the United States Secretary of the Treasury, along with leading financial institution CEOs, brought together under the umbrella of the Glasgow Financial Alliance for Net Zero (GFANZ).
GFANZ released its initial progress report today, announcing that financial institutions representing over $US130 trillion of investment, have committed to reach net zero across their financing activities by 2050 or sooner. Macquarie, a member of both the Net Zero Banking Alliance and the Net Zero Asset Manager’s Initiative, has been leading the ‘emerging markets and developing economies climate finance mobilisation’ workstream of GFANZ.
In that role, Shemara was invited to discuss opportunities and challenges to accelerate capital flows into these markets at an event hosted by the COP Presidency, which also included Sri Mulyani, Finance Minister of Indonesia; Mark Carney, UK Prime Minister’s Finance Adviser for COP26; Janet Yellen, US Treasury Secretary; Jon Johnsen, CEO of PKA, the Danish pension provider; and Maheen Rahman, CEO of InfraZamin, an initiative set up to address the lack of availability of funds for infrastructure financing in Pakistan.
Shemara also joined a panel discussion featuring Australia's Minister for Energy and Emissions Reduction and the CEO of the Australian Renewable Energy Agency to discuss the Australian Government’s Low Emission Technology Statement and ambitions for reaching net zero by 2050, along with other members of the Minister’s Technology Investment Advisory Council.
And the Macquarie delegation took part in discussions on the launch of the FAST-Infra Sustainable Infrastructure label (see the report from 2 November below), the role of green banks and development finance institutions, and a BSI panel on how standards support greater trust and transparency in investment decisions.
Today at COP26, President Biden launched the Global Methane Pledge, which aims to cut emissions of this greenhouse gas by 30 per cent by 2030. Methane has a considerably higher warming potential than carbon dioxide, making it one of the most important levers of climate action in the race to net zero. In other news, world leaders from 40 countries including the UK, US, India, China and the EU announced a new initiative aimed at making clean technologies the most affordable, accessible and attractive choice across each of the highest emitting sectors by 2030, especially in the developing world.
The Macquarie delegation met with Makhtar Diop, Managing Director of the International Finance Corporation, to discuss the climate finance mobilisation agenda. A key initiative in this area is FAST-Infra — the ‘Finance to Accelerate the Sustainable Transition-Infrastructure’ initiative — which today launched a consistent, globally applicable labelling system for sustainable infrastructure assets designed to help address the investment gap for this asset class, which is particularly acute in emerging markets. Macquarie and HSBC, as part of the Sustainable Markets Initiative, have worked on the development of the FAST-Infra SI label.
Shemara Wikramanayake, Managing Director and Chief Executive Officer of Macquarie Group, attended a green technology leaders’ breakfast hosted by the Prime Minister of Australia to discuss the country's net zero ambition and plans to become a major exporter of clean commodities.
The Macquarie delegation also had the opportunity to meet with the Irish Taoiseach Micheál Martin to discuss the country’s ambitious sustainable infrastructure development plans. Ireland has one of the world’s most ambitious clean electricity targets, at 80 per cent by 2030.
World leaders took to the stage in Glasgow to kick off two weeks of global climate negotiations.
India provided the first breakthrough at COP26 by announcing its net zero goal for 2070 and an increased clean energy deployment target of 500 GW by 2030. Though 2070 may seem distant when compared to the 2050 goal set by most countries, India’s per capita emissions are just one third of the global average and the pledge could see the country's emissions growth peak as early as 2030.
CFLI India, an initiative co-chaired by the Tata Group and Macquarie, also announced its founding members. Nine leading Indian and international financial institutions and organisations are coming together to help accelerate private climate finance flows in support of India’s decarbonisation commitments. The India announcement highlighted the important role played by emerging markets and developing countries in making COP26 a success.
The Macquarie delegation started its activities by meeting with Pham Minh Chinh, Prime Minister of Vietnam, to discuss the country’s climate ambition. Vietnam has installed over 20 GW of clean energy over 2019-2020, and Macquarie has been working to develop new offshore wind projects to support the country’s energy transition.
Non-OECD countries generate around 65 per cent of global emissions1 and achieving emissions reduction in these economies is challenging. Other than wind and solar, the cost of low-emissions technologies is not yet at parity with - or below - conventional forms of energy. These economies also often lack an enabling environment for the private capital investment needed to give them the confidence to commit to more ambitious emissions reductions targets.
Lower-middle and low-income countries received just 5 per cent and 0.3 per cent, respectively, of global clean energy investment from 2011 to 2020. The COVID-19 pandemic decreased these levels, even as it increased in high-income markets.2
The Climate Finance Leadership Initiative (CFLI) was established in January 2019 by Michael Bloomberg, the UN Secretary General’s Special Envoy for Climate Action, and brings together global business leaders to consider how to mobilise and scale private capital for climate solutions in emerging markets. CFLI members have committed to deploy $US20 billion of emerging market climate finance by 2025.
It also seeks to strengthen the links between private sector and publicly funded development finance institutions to create conditions conducive to greater private investment. Co-chaired by Shemara Wikramanayake, Macquarie Group CEO, and Natarajan Chandrasekaran, Chairman of Tata group, CFLI India is the first in a series of country pilots that are multi-year efforts to align public and private resources around a narrow set of high-priority, sector-specific opportunities in emerging market countries, with the aim of creating lasting access to rapidly growing offshore pools of sustainable capital.