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ToggleWhat do POPs represent?
COPs (Conferences of the Parties) are annual meetings organized under the United Nations Framework Convention on Climate Change (UNFCCC), an international treaty adopted in 1992 to address the climate crisis.
Relevant points of the COPs:
- They bring together the signatory countries of the UNFCCC to coordinate global efforts against climate change.
- Historic agreements have been reached at these meetings, such as the Kyoto Protocol (1997) and the Paris Agreement (2015).
- COPs are the space where emission reduction targets, climate finance mechanisms and mitigation and adaptation strategies are established.
- Each year, progress is evaluated, and new commitments are sought to address the global climate emergency.
About COP29 in Baku
Held in Baku, Azerbaijan, from November 11-22, 2024, COP29 has reflected both progress and tensions in the fight against climate change. Despite the political and geopolitical challenges – including the shift in US climate policy following the recent elections – one of the main achievements has been progress towards the creation of a global market for carbon credits, a key tool for channeling resources towards the ecological transition.
Article 6 and carbon markets
Article 6 of the Paris Agreement provides a framework for transparent and high quality carbon markets, allowing countries and companies to collaborate on emissions reductions.
- Advantages: This system could save up to $250 billion annually in the implementation of national climate plans (NDCs), increasing the efficiency of climate investments.
- Operation: Countries with higher emissions can finance projects in other countries that reduce emissions or protect ecosystems, benefiting both parties.
COP29 President Mukhtar Babayev said, “We have unlocked a key tool to keep the 1.5 °C target within reach. Climate change is a transnational challenge, and Article 6 will enable transnational solutions.”
Geopolitics and tensions at COP29
The dynamics between powers such as the U.S. and China have had a significant influence:
- US: The change in leadership towards an administration less committed to the Paris Agreement has generated global uncertainty.
- China: Positioning itself as a leader in renewable energy, taking a more prominent role in climate cooperation.
- East-West: Disagreements persist between developed and developing countries on financial responsibility and climate targets, making consensus difficult.
Impact on inbestMe’s SRI portfolios
At inbestMe, we firmly believe that socially responsible investment (SRI) remains essential, not only from an ethical perspective, but also from a financial one.
While COP decisions do not directly impact our SRI portfolios, they are designed to align with three key objectives:
- Eliminate controversial industries: We exclude sectors such as fossil fuels or companies with socially questionable practices.
- Maximize the presence of companies with high ESG indices: We prioritize companies that lead in sustainability within their sectors.
- Promote positive impact investment: We incorporate index funds or green bond ETFs that finance projects with environmental and social benefits.
If you are looking for an indexed portfolio with a clear focus on the fight against climate change or the Net-Zero objective, please do not hesitate to contact us. We can design for you a customized Advanced portfolio (available from €100,000/USD) with this specific orientation.
Our long-term vision:
Choosing an SRI portfolio has more to do with personal values and preferences than with an expectation of higher returns. In our experience, these portfolios have shown a similar performance to traditional ones over the long term, although they may have occasional variations.
COP29 reinforces the need to continue promoting sustainable investments. At inbestMe we will remain committed to offering responsible investment options aligned with a greener future with the conviction that the investment will be sustainable, or it will not be. 🌱