The SRI Chronicles : Economics and geopolitics to the rescue of COP 31

By Jean-Philippe Desmartin, Head of the Responsible Investment Team at Edmond de Rothschild Asset Management (France).

Multilateralism has never faced such challenges since the creation of the United Nations at the end of the Second World War. However, the COPs are the result of global agreements under the auspices of the United Nations. In this context, hopes for the next COP, scheduled to take place in Antalya, Turkey, from 9 to 20 November (a few days after the US "Midterms" elections on 3 November), may seem slim.

While Turkey has the capacity to engage in dialogue with governments from the West and the Global South, its leadership has historically been weak on climate issues. Australia, which was competing with Turkey to host the next COP, has obtained the presidency, but its contribution is difficult to assess at this stage. In terms of governments and potential global progress, the outlook is bleak. The United States, the second-largest emitter after China and ahead of India, will not be represented for the second year in a row, and is openly encouraging other countries not to participate. Oil- and gas-exporting countries will be all the more confident in impeding any commitment to reducing greenhouse gas (GHG) emissions from fossil fuels, which account for about 80% of the global challenge. Financing will also be a complicated subject at a time when the UN is facing arrears of several billion dollars.

So, is all hope lost? No, because an economic and geopolitical shift has been underway since March 2026. The war in Iran has led to rising fossil fuel prices and raised questions about access to supply for entire continents, such as Africa, Asia (excluding the Middle East) and Europe. The world is realising first-hand that fossil fuels can also become 'intermittent', and dependent countries (governments, consumer citizens, and the private sector) are reacting by taking a closer look at China's experience in terms of energy transition. As a result, outside the United States, sales of electric vehicles (in Latin America and Europe, for example) and solar panels (in Africa and Asia, for example) have exploded since last March, creating growing challenges for the capacity and continuity of electricity distribution networks.

COP 31 is not only an environmental and social challenge; it also involves reducing the use of fossil fuels and making massive investments in decarbonisation solutions such as energy efficiency, renewable energies, electrification and green hydrogen. The transition that China has already largely begun is also an economic and energy sovereignty challenge aimed at reducing dependencies. During COP31, we could therefore see progress by groups of countries (Europe, Japan, Australia, etc.) and/or economic sectors that will partially address the economic and geopolitical challenges posed in terms of energy. Above all, we can reasonably expect to see concrete progress on solutions (such as opportunities and renewables) in the face of opposition to reducing GHG emissions (risk component).

SUMMARY: 
Editorial: Economics and geopolitics to the rescue of COP 31. by Jean-Philippe Desmartin
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