On 6 December, FCLTGlobal hosted a webinar with corporate and finance leaders following the 2021 United Nations Climate Change Conference (COP26). COP26 took place in the face of a rapidly growing consensus about the worsening impacts of the climate crisis. Governments and non-state actors alike are starting to understand that urgent and ambitious action is needed from all stakeholders to mitigate the worst impacts of climate change. 

Capital allocation is critical in this context. Public and private finance are required at speed and scale to fund the development of infrastructure, technology and innovation needed for the transition to a more climate resilient economy. Companies and investors are signaling their readiness for the climate transition by establishing net zero and other climate change commitments. However, skepticism remains about the short-term implications of such commitments, and how they translate into the actions needed for a positive long-term impact on the planet, the economy and organizations themselves.

Senior executives from across the value chain weighed in on how companies and investors can work together to drive the transition, take advantage of emerging climate-related risks and opportunities, and seize this moment as a catalyst to remake capital markets to be more supportive of longer-term business and investment decision making.

FCLTGlobal was joined in conversation by:  

• David Blood, Founding Partner and Senior Partner at Generation Investment Management 
• Jim Fitterling, Chairman and CEO of Dow 
• Pam Holding, Co-Head of Equity and Asset Management Lead on Sustainable Investing at Fidelity Investments 
• Kim Thomassin, Executive Vice President and Head of Investments in Quebec and Stewardship Investing at CDPQ 

These executives emphasized that:  

• The transition to a more climate-resilient economy is fundamentally a challenge of long-term capital allocation. Investors and corporate leaders must take the long view in order to fund the infrastructure, technology, and innovation needed for an effective transition. 
• Leading investors and companies are moving beyond commitments to operationalize their transition plans. After making net zero commitments, leading organizations set specific targets, craft detailed investment plans, and begin executing right away. Measuring results and linking rewards to achievement of targets drives real action. 
• Delivering on climate commitments will have significant reputational impacts. The climate crisis presents significant environmental and economic risks, making it a politically and emotionally charged issue for many stakeholders. Investors and companies must follow through on their transition commitments or risk significant reputational fallout.  
• Effective policy and regulation will be a competitive differentiator for markets across the globe. As countries respond to the climate crisis, the systems that most effectively price carbon and create transparency will attract corporate and investor capital to fund their transitions.