27th UN Climate Change Conference, Sharm El-Sheik, Egypt

Will next UN summit make bolder progress on climate change?

The eyes of the international business community will once again be firmly on the United Nations Climate Change Conference, as organisations seek to understand the interplay between climate goals and their own operations.

Built around the four pillars of COP, mitigation, adaptation, finance and collaboration, COP27 will seek to address the global measures needed to tackle the challenge of climate change, building on the progress made at last year’s conference. With a focus on the financial and operational support required to achieve ambitious targets, including the specific goals and challenges around investments in the Global South, new opportunities and just investment will be top of the agenda.

Governments, policymakers, investors and businesses recognise the need to come together to scale finance, technology and markets to enable progress through strong leadership and governance – but just how far do the promises made at COP26 go towards achieving this, and what work still needs to be done?

In the run up to COP27, we will be tracking and reporting on the progress of climate change negotiations and the implications across core industry sectors. Bringing together our experts and leading thinkers from commerce and academia, we will explore what the summit means for business and how you can ensure you stay current and compliant.

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Finance

Building on COP26, the finance community will need to play a critical role in the transition to a low carbon future. In response to this, the volume and complexity of sustainable financial instruments is growing alongside rising demand from investors and lenders. There is also increasing focus among the investment community on whether finance law needs to change to drive greater progress on sustainability-related goals.

Read more about what we expect to see next in sustainable finance and the evolution of capital markets. We analyse whether the law in 11 key financial hubs around the world enables – or requires – institutional investors to invest for sustainability impact, in ‘A Legal Framework for Impact’, our report for the The Generation Foundation, the UN-supported Principles for Responsible Investment (PRI) and the UN Environment Programme Finance Initiative (UNEP FI).

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Regulation

Regulation is one of the key levers being used to accelerate progress on climate goals, whether in the form of tax incentives, climate-related disclosures or EU state aid. In the year following COP26 we have seen an increase in the publication of draft standards for sustainability reporting across numerous jurisdictions that international business will now be required to navigate. Policymakers are also considering whether antitrust regimes need to be loosened to enable the sort of collaboration required to drive meaningful progress.

Ahead of COP27, explore further all aspects of climate-related regulation, including our work to advance thinking around corporate sustainability reporting.

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Litigation

Climate related litigation is no longer the concern of only energy companies in relation to their perceived contribution to global emissions. Strategies used by plaintiffs are broadening in scope, including targeting of financial institutions over the activities of the businesses they finance and the accuracy of their climate risk disclosure. COP26 led to increased scrutiny of business decisions from an ESG perspective, a trend we expect to continue following COP27.

Our teams share their insights on trends in climate-related litigation and how businesses are navigating this increasingly complex landscape.

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Transactions

The effects of climate change and responsive strategies decided at conferences such as COP27 are driving businesses globally to re-think, re-calibrate and sometimes even re-invent their business models. Both physical and transition risks are increasingly influencing the value of businesses and their profitability. As a result, understanding these issues in the context of corporate transactions is a vital component of robust due diligence, and goes to the heart of the value deals can deliver.

We help our clients assess the physical, people, regulatory and litigation risks facing their investments and seize opportunities in cleantech and the energy transition. Our global teams share their insights on key climate-related transactional issues in the resources below.