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By: Reena Parmar, Peter Allen, Duncan Kellaway, FreshFields LLP

The 2021 UN Climate Change Conference (COP26) was deemed by many to be a modest success, with some tangible positive progress achieved. We saw an increased focus on the role of finance in transitioning to a low carbon future, including new pledges for public climate funding from developed countries, alongside pledges made by members of the Glasgow Financial Alliance for Net Zero (GFANZ) to mobilise finance by aligning US$130 trillion of private finance to science-based net zero targets.

As world leaders gather in Egypt for the 2022 UN Climate Change Conference (COP27), the urgency of the need to transition to net zero remains unchanged - but the geo-political and macro-economic landscape has changed dramatically in the 12 months since COP26, with headwinds related to the war in Europe, the ensuing energy security crisis, food and commodity price rises, spiralling inflation and interest rates, and turbulent financial markets, potentially causing a loss of momentum for the movement to net zero generally, and in particular for sustainable finance. However, the sustainable finance market is dynamic, and we expect it to continue to evolve, innovate and adapt in response to these challenges.

Are we moving backwards, rather than forwards, with the sustainable finance agenda?

The public and private pledges to mobilise sustainable finance at COP26 were important statements of intent, but it remains to be se......................

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