Ahead of COP27 which takes place from 6 November to 18 November in Egypt, Jean-Philippe Desmartin, head of responsible investment at Edmond de Rothschild Asset Management, discusses key issues and the impact on investors' portfolios with WealthBriefing. 

Despite increasing concerns about the impact of climate change on the planet, Jean-Philippe Desmartin at Edmond de Rothschild Asset Management is not optimistic about the outcome of COP27, mainly due to geopolitics and the war in Ukraine.

He told WealthBriefing in an exclusive interview that the outcome will be less positive than last year as climate change is not top of many government’s priorities, even though it is good news that COP27 is being hosted by an emerging country.

“There is a fear that due to geopolitics, notably the war in Ukraine and the trade dispute between the US and China, the results of COP27 could be disappointing,” he said. 

Last year, there was public support to cut fossil fuel consumption but this is unlikely to be repeated this year due to the energy crisis provoked by the war in Ukraine, he continued.

However, he is more optimistic about the move towards renewables, such as wind and solar, in the longer term.

The agenda for the 27th Conference of the Parties to the United Nations Framework Convention on Climate Change includes discussions on clean technologies, the centrality of water and agriculture to the climate crisis, as well as biodiversity loss, energy transition and decarbonisation efforts. 

The annual meeting includes delegates from nearly every country to negotiate goals for tackling climate change.

Desmartin doubts that there will be big moves on reducing agriculture emissions at COP27, as many governments don’t want to address it. This could impact PeakBridge – a member of the Edmond de Rothschild Private Equity Partnership – which focuses on food tech start-ups with sustainability and ESG goals, reimagining food and agriculture systems.

It focuses on five high potential segments, notably alternative proteins, digitalisation and food system 4.0, new farming systems, ingredients' innovation, nutrition and health.

He believes that the "climate" and "biodiversity" COPs should be merged under the same banner, arguing that the interdependent element of the climate and nature crises exacerbates this need.

Eighty-four per cent of the firm’s assets under management come under article 8 or 9 of the EU’s Sustainable Finance Disclosure Regulation, he said, and the firm aims to make this 100 per cent.

Nevertheless, he believes that the $100 billion promise developed countries made at COP21 in Paris should start to materialise. This is after South Africa’s cabinet endorsed an investment plan in October to help the country transition away from coal, a key element to securing the $8.5 billion in climate financing agreed by developed countries.       

Therese Niklasson, head of sustainable investment at Newton Investment Management also finds it hard to see big progress at this year’s COP. 

“That said, each COP seems to bring something improved to the table and that could be further commitments from developing countries like Brazil, Indonesia and South Africa. We also hope and think more countries may back last year’s pledges related to forests, coal and methane, all important parts to the puzzle,” she added.