COP28 fell short, but renewables investing is promising, advocates say

investmentnews.com:

The 28^th Conference of Parties concluded Wednesday with a historic agreement to move away from fossil fuels – but what that means for sustainable investing is unclear at best.

The agreement from the United Nations-convened COP28, signed both by counties with an interest in phasing out oil and gas and those that strongly benefit from fossil-fuel production, is not legally binding. Nonetheless, it is a positive development that shows the world will increase the use of renewable energy sources, financial professionals said.

It was a relatively surprising development, given the doubts observers had that any progress would be made. That skepticism stemmed from the event being held in the United Arab Emirates, presided over by the CEO of Abu Dhabi National Oil Co., and reportedly attended by more than 1,000 oil-industry lobbyists. The agreement did not detail plans to phase out fossil fuels, despite its focus on shift toward cleaner energy sources.

“We’re happy to see what has happened in Dubai,” said Charlie Donovan, senior economic advisor at Impax Asset Management, who has worked for the EPA, helped launch BP Alternative Energy and headed Imperial College London’s Centre for Climate Finance and Investment.

Even so, the lack of any mechanism to hold countries accountable for following through “is the inherent flaw in the process overall,” Donovan said. “We do not have the kind of legal system internationally that can effectively enforce these agreements.”

The agreement comes at a precarious time for sustainable investing in the U.S. As some right-wing politicians have sought to vilify ESG, or environmental, social and governance criteria in investing, climate activists have pushed back. Companies like BlackRock and Vanguard