AXA IM comments on the COP 24 UN climate summit in Katowice

Lise Moret, in the Responsible Investment team at AXA IM, comments on the COP 24 UN climate summit in Katowice.

“Time to scale up ambitions!”

The 2-degree target is not ambitious enough, a more ambitious target is required.

• According to the IPCC’s (Intergovernmental panel on Climate Change) recent special report (SR1.5), limiting global warming to no more than 1.5°C as a global average over pre-industrial levels will help avoid dramatic and permanent damage to the planet.
• Hence, in order to limit temperature increases by 1.5°C, anthropogenic emissions of CO2 must decline by at least 45% by 2030 (from 2010). Emissions must further reach net zero by the year 2050.

What is at stake at the COP 24?
Negotiating the Paris Rule Book, and scaling up ambitions before 2030.

• The Paris Agreement rule book contains an obligation for each country to determine, plan, and regularly report on its emissions reductions. At the COP 21 in Paris in 2015, nearly 200 countries committed to reducing their greenhouse gas emissions (i.e. the nationally determined commitment - NDCs).
• However, we find these commitments on emission reductions are not sufficient to bridge the emissions gap by 2030. Current NDCs – if implemented – will still mean global temperature rises of just under 4 degrees.
• The additional effort needed is substantial: the UN Framework Convention on Climate Change (UNFCCC) estimates that countries would have to triple their emissions reduction ambition by 2030 to meet the 1.5° scenario target.
• The COP 24 in Katowice is crucial because 2018 is the deadline that the Paris Agreement’s signatories agreed to for the implementation of the Paris rule book commitments.
• However many elements will still need to be defined such as the financing of global climate action and the question of how poorer countries should be supported, but this is also the occasion to scale-up the commitments, accelerate and pace of climate action among parties.
• Discussions may be compromised by political barriers, and emissions reduction track record is already poor.

Discussions in Katowice may be nevertheless compromised by some barriers and political issues. In particular, the US position is currently influences other countries also back-tracking with the threat to withdraw from the agreement, such as Brazil.

• In addition, the CO2 emissions reduction track record is incredibly discouraging. While global CO2 emissions stagnated for three years from 2013-2016, they increased again in 2017. According to the last 2018 UNEP Gap report, the emissions gap has increased significantly in comparison with previous estimates.
• The majority of G20 countries are not yet on a path that will lead them to fulfilling their NDCs for 2030. Based on an assessment of current policies, around half of G20 members fall short of achieving their unconditional NDCs.

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AXA Investment Managers is strongly committed to the TCFD framework. It signed the 2018 Global Investor statement to Governments on Climate Change, supported by 350 investors and sponsored by initiatives such as the IIGCC (Institutional Investors Group for Climate Change) and the UNPRI (Principles for Responsible Investment).

On the eve of the COP24, more than ever, AXA IM reiterates its full support for the Paris Agreement and strongly urge all governments to implement the actions that are needed to achieve the goals of the Agreement, with the utmost urgency.