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This is an audio transcript of the FT News Briefing podcast episode: COP26 — a climate gathering like no other

Marc Filippino
Good morning from the Financial Times. Today is Monday, November 1st, and this is your FT News Briefing.

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Marc Filippino
The massive UN Conference on Climate Change is under way in Glasgow, and our environment reporter Leslie Hook gives us a preview. And then we’ve got highlights of a debate between two of our leading commentators, Rob Armstrong and Gillian Tett, go head-to-head over whether socially responsible investing can change the world. I’m Marc Filippino and here’s the news you need to start your day.

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Marc Filippino
Glasgow, Scotland is the centre of our warming world right now, and it will be for the next week or so. The city is hosting the annual United Nations Conference on Climate Change, or COP26. World leaders like US president Joe Biden will be there along with climate celebrities like Greta Thunberg. The FT’s team of journalists covering COP26 includes our environment reporter Leslie Hook. She joins me now. Hi, Leslie.

Leslie Hook
Hi, Marc.

Marc Filippino
So Leslie, how big is this? You know, how many people, the size of the venue and what is it supposed to accomplish?

Leslie Hook
Well, this is the biggest climate summit since the 2015 Paris accord. There’s expected to be around 25000 people and 120 heads of state. It’s also the biggest diplomatic event since the pandemic began. And the goal of this Glasgow summit is to finalise the rules of the Paris climate accord. So six years ago in Paris, countries came together and all agreed to limit global warming to well below 2 degrees Celsius, ideally 1.5 degrees Celsius. But they actually left a lot of the fine print to be figured out later, and that later is right now. So there’s a lot of nitty-gritty questions like, how do you report your emissions of your country? Like, what form do you use? Who audits that report of your emissions? Another topic is how can countries exchange carbon offsets? Trade carbon offsets, buy and sell carbon offsets between each other? What’s the framework governing that global carbon market? So we’ve got some really thorny details to be worked out in Glasgow. That’s kind of the fine print of the summit.

Marc Filippino
So this feels like a kind of a major milestone for the Paris agreement, right?

Leslie Hook
Exactly. And some people going to even further and say this is the moment of truth for the Paris accord. Will the Paris climate accord really have solid rules that mean that there’s no loopholes, everyone’s on the same playing field and that it has sort of teeth, if you will?

Marc Filippino
So Leslie, how else is this COP26 different from previous UN climate meetings?

Leslie Hook
COP26 this year is also a really big political moment, even outside of the technical process, the negotiations that are going on with all the government officials. It’s also kind of a bit of a moment. It’s a big stage for announcements about things countries are doing independently of the Paris climate accord. One of the big announcements will be about cutting methane emissions. Methane is a powerful warming gas that comes from natural gas and from cows and from rice paddies. We’ll also see a bunch of corporate pledges around electric vehicles, which is, which is pretty exciting.

Marc Filippino
So, Leslie, I wanna zoom in a little bit on China. What kind of presence does China have at COP26?

Leslie Hook
Well, China is the world’s biggest emitter. President Xi Jinping is not coming to Glasgow in person. He hasn’t left China since the beginning of the pandemic. But China did submit a formal climate target to the UN, which said it will peak emissions before 2030, and that was basically confirming stuff that had already been cited in speeches, so it was considered a disappointment by climate advisers. But what’s been interesting, Marc, just in the last few weeks, is we’ve seen quite a few of the world’s biggest emitters come up with new pledges and targets. Some of these are very well thought through. Some of them are not very well thought through. We’ve even seen big energy producers like Saudi Arabia and Australia suddenly say that they’re setting these net zero goals. We still don’t really know how they’re gonna get there, what policies might be in place or not in place. But there has been just a flurry of new pledges ahead of Glasgow because leaders don’t want to show up empty-handed.

Marc Filippino
Leslie, what are you looking for in particular at this conference?

Leslie Hook
I think one thing that’s really unusual about this COP compared to previous COPs is the level of sort of corporate presence, CEOs and business events that are surrounding like the outside of the COP. I mean, if you think of the COP like an onion, the centre of the onion is the governments and the negotiators. And then the next layer is like the observers from climate charities and non-profits and scientific advisers. And then you also have protesters. And then the very outer skin of the onion usually is kind of companies. But this year, where we really are expecting to see a lot of corporate announcements, particularly from carmakers, energy companies. So it’s been interesting to watch how the goals of the Paris accord have very much become something that a lot of the world’s biggest companies are starting to think about and talk about. And they really wanna be seen and heard in Glasgow. They want to appear to be there, which, you know, on the one hand, is great. On the other hand, it does raise the risk of greenwashing a bit. But that’s one thing that definitely feels a little different to previous years.

Marc Filippino
Leslie Hook is the FT’s clean energy and environment reporter. Thanks, Leslie.

Leslie Hook
Thanks, Marc.

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Marc Filippino
COP26 organisers say investors, businesses, financial groups, banks and insurance companies, they all need to step in and ensure the planet doesn’t overheat. And many already are stepping in. Trillions of dollars have poured into financial funds that invest in environmental, social and governance criteria. It’s called ESG. But there’s still a lot of debate over how much benefit ESG can have. The current season of the FT’s Behind the Money podcast asks this very question. And in the latest episode, host Manuela Saragosa mediated a debate between two of our own FT columnists who have very different views on this. One is Robert Armstrong. He’s our US financial commentator and he’s an ESG sceptic. And the other is Gillian Tett. She’s the FT’s US editor-at-large and co-founder of the FT’s Moral Money newsletter. Here are some of the highlights of their debate.

Gillian Tett
Well, how about the idea it’s not an either-or, it’s not a zero-sum game.

Robert Armstrong
I just think. No, I think it’s a, it’s a, it’s a negative.

Gillian Tett
What do you think?

Robert Armstrong
I think that the idea that ESG is out there making things better, I don’t understand how that can’t make people more passive.

Gillian Tett
Well, let me say this: if there was no public pressure right now, if there were no companies jumping up and down, if there wasn’t any discussion, we wouldn’t have been talking about a carbon price. The highest chance we have of getting people prodding the governments into doing a carbon price is a combination of the IMF yelling at them, of NGOs yelling them. So actually, I would love to believe that people would automatically do the right thing on the part of governments without wider pressure. I just don’t think it’s gonna happen.

Robert Armstrong
I think that pressure needs to happen and the effective kind of pressure comes on the consumer side, right? With the kind of pressure that matters to a fossil fuel company is watching the number of people who buy electric cars goes up.

Gillian Tett
Well, Robert, can I quick jump in this? Okay, okay. Why do we have electric cars seeming cool right now? It might be because that nice man Elon Musk has spotted a market opportunity, he’s been cheered on by investors. Tesla’s share price has gone to the moon. And yes, there’s a load of bollocks in it, yes there’s a bubble in it, you know, like there are many things. However, the very fact he has done that, coupled with the fact you have a bunch of investors in traditional mainstream car companies saying, we’re not sure it’s a great idea to keep producing petrol-based cars. How about you big automakers start looking at electrical cars, suddenly means that the zeitgeist has changed. The tank was turned.

Robert Armstrong
Hmm. I would just, I would just make a strong distinction between the difference that our choices as consumers make and the difference between our choices as owners of financial assets.

Manuela Saragosa
So is it in the end, is this ESG sort of this wave of money we’ve seen going into ESG funds, do you think, Robert, this is a fad that will pass or is this something that’s gonna stick around?

Robert Armstrong
I don’t know if it’s a fad or not. What I do know is it’s not gonna make much difference. It doesn’t. It just doesn’t matter that much, except to the lawyers, consultants . . .

Gillian Tett
But it also matters to . . . 

Robert Armstrong
And some managers who are lining up at the . . .

Gillian Tett

Gillian Tett
. . . to the retail investor as well. It matters to the retail investor.

Robert Armstrong
There are some things you just can’t touch and live with yourself, and that is a very legitimate moral choice. But it is not an effective form of activism that changes the world.

Manuela Saragosa
And Gillian what if someone who cares about the environment, cares about climate change, cares about social justice, diversity, inclusion, what advice would you give if they’re looking at this, at what’s going on now? This debate within ESG and in ESG investing? What should they bear in mind?

Gillian Tett
Well, I think that, you know, if they care about these issues, they should think about whether they want to actively invest in companies which are never mind avoiding doing things they don’t like, like fossil fuel, but find ways to invest in things they do like, like backing, you know, renewable energy or backing companies which are actively trying to, you know, have better social norms. So there are ways to actually try and act positively, proactively to uphold what you believe in.

Marc Filippino
That’s Gillian Tett, the US editor at large and co-founder of the FT’s Moral Money newsletter, in debate with our US financial commentator, Robert Armstrong. You can listen to their full debate in this week’s episode of Behind the Money, which is out now.

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Marc Filippino
You can read more on all of these stories at FT.com. This has been your daily FT News Briefing. Make sure you check back tomorrow for the latest business news.

This transcript has been automatically generated. If by any chance there is an error please send the details for a correction to: typo@ft.com. We will do our best to make the amendment as soon as possible.

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