COP27 commenced on Sunday against a tumultuous global backdrop of significant disruption to food security, energy supply and geopolitical stability, we hope to see the global decarbonisation trajectory stay on course. 

As an organisation, Old Mutual Investment Group firmly believes in the concept of economic decarbonisation in terms of our Net Zero commitment. As a preamble to COP27’s outcomes, it is important to note that portfolio decarbonisation has no real-world impact. Proactive stewardship through investee company engagement is the only way to achieve any measurable real-world impact with a Sustainable Development Goals (SDG) aligned outcome. Within the local context, we believe that a just transition equity benchmark is crucial for emerging markets to remain investable while staying on track to meet our net zero commitments and all portfolio level commitments to decarbonisation should be held up against such a benchmark.

In anticipation of the summit, there are a few crucial issues that we will be looking out for next week, in order to support our own real-world decarbonisation goals:

We are particularly excited about the prospect of this year’s COP generating some bilateral commitments to the provision of transition finance which would be directed toward supporting real world decarbonisation across emerging markets – particularly African economies. There is an urgent need for a clear commitment around funding through the Just Energy Transition Partnership deal to come out of the summit to support SA’s Just Transition. This would enable the achievement of progress on a range of other environmental and socioeconomic issues – particularly through support of green economy growth, which the World Bank has shown would catalyse economic growth and development in markets like South Africa. 

Key to ensuring that the global transition to net zero emissions is socially just, will be a commitment from asset owners and managers to be increasingly active owners of their assets, investing in their capacity to engage proactively with companies as they steward these companies through their transition journeys.

As a responsible investor operating in an emerging market and committed to stewarding South Africa toward more sustainable and inclusive ways of doing business, we look forward to the prospect of COP27 as a platform, not only for securing transition finance, but also for sharing knowledge, ideas and other resources to ensure that we are doing everything that we can to accelerate the transition to net zero.

OMIG recently became a signatory of the Global Investor Statement, a joint statement, signed by 602 investor signatures representing almost US$42 trillion in assets under management, calling on governments to raise their climate ambition and implement meaningful climate policies ahead of COP27. As a signatory of this initiative, we hope to see clearer policy frameworks come out of COP27 that encourage capital flows towards urgent climate action in order to better support our ongoing ESG investment strategy, underpinned by stewardship of clients’ assets as we work towards real-world decarbonisation.