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COP26 coalition worth $130 trillion vows to put climate at heart of finance

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November 3, 2021

By Simon Jessop and Andrea Shalal

GLASGOW (Reuters) – Banks, insurers and investors with $130 trillion at their disposal pledged on Wednesday to put limiting climate change at the centre of their work, and got support in the form of efforts to put green investing on a firm footing.

An announcement made at the COP26 U.N. climate conference https://www.reuters.com/business/cop in Scotland commits its signatories, who account for around 40% of the world’s capital, to assuming a “fair share” of the effort to wean the world off fossil fuels.

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A main aim of the COP26 talks is to secure enough national promises to cut greenhouse gas emissions – mostly from burning coal, oil and gas – to keep the rise in the global temperature to 1.5 degrees Celsius.

But how exactly to meet those pledges, particularly in the developing world — is still being worked out. Above all, it will need a lot of money.

U.N. climate envoy Mark Carney, who assembled the Glasgow Financial Alliance for Net Zero (GFANZ), put the figure at $100 trillion over the next three decades, and said the finance industry must find ways to raise private money to take the effort far beyond what states alone can do.

“The money is here – but that money needs net zero-aligned projects and (then) there’s a way to turn this into a very, very powerful virtuous circle – and that’s the challenge,” the former Bank of England governor told the summit.

Carney’s comments reflected a problem often cited by investors who, in the face of a myriad of climate-related risks, need to be sure that they are being accounted for in a transparent and preferably standardised way around the globe.

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“Some of the key interlocking pieces of the finance puzzle are now coming together,” said Nick Robins of the Grantham Research Institute on Climate Change and the Environment.

“The $130 trillion in assets committed … is the moment when finance commits to reallocate capital at scale and speed.”

LOOPHOLES

However, others were not convinced.

“These happy headlines conceal a wealth of loopholes and opportunities for backsliding that we cannot afford if we are to avoid climate breakdown,” the Environmental Justice Foundation said in an emailed statement.

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“Net zero pledges mean nothing without fossil fuel divestment. Time for financial institutions to put their money where their mouth is and stop funding climate-destroying fossil fuels,” the NGO’s CEO Steve Trent added.

Carney has led an effort to ensure that financial institutions account for and disclose the full climate risks of their lending or investments, forcing the wider economy to price in costs that until now been largely concealed.

These include not only the direct effects of more frequent extreme weather events, but also costs such as a loss of government subsidies for fossil fuels, or the knock-on health and environmental costs of greenhouse gas emissions.

Kristalina Georgieva, head of the International Monetary Fund, said it was crucial to incorporate climate data into everyday macroeconomic reporting.

China’s central bank governor, Yi Gang, said Beijing was working on a new monetary policy facility to provide cheap funds for financial institutions to support green projects, and that the People’s Bank of China (PBOC) and the European Union would soon publish a shared definition of green investment.

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And the vice chair of the global Financial Stability Board, Dutch central banker Klaas Knot, said a mandatory global minimum standard for disclosure of climate risks was now needed for both financial stability and the provision of sustainable finance.

‘GREENWASHING’

Jane Fraser, CEO of Citigroup, a GFANZ member, said it was remarkable that the initiative would influence $130 trillion in funds, but that it needed scale to work.

“If you don’t work together, you’re going to come up with a lot of nice really speeches, but you’re … in danger of being divorced from reality,” she said.

Investors are certain to welcome the launch of a global standards body to prevent companies giving a flattering picture of their climate policies and business practices in what is already a multitrillion-dollar global market for environment, social and governance (ESG) targeted funds.

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“We are really focused on greenwashing,” said Ashley Alder, chair of IOSCO, the global umbrella body for securities regulators, which helped set up the International Sustainability Standards Board (ISSB).

“It’s super important, and if you don’t have basic information on a globally comparable basis, then you increase the risks of greenwashing enormously.”

Private sector enthusiasm for mobilising climate-friendly investment also requires the assurance that governments are setting emission reduction goals that are ambitious enough to meet the 1.5 Celsius goal – something that is by no means certain to happen by the end of COP26 on Nov. 12.

U.S. climate envoy John Kerry told a meeting of world mayors the pledges made so far gave the world only a 60% chance of capping warming at 1.5 Celsius.

(Additional reporting by William James, Elizabeth Piper, Mark John and Huw Jones; Writing by Kevin Liffey and Alexander Smith; Editing by Katy Daigle and Kevin Liffey)

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Iran plays hardball as nuclear talks with world powers resume

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November 29, 2021

By Francois Murphy, Parisa Hafezi and John Irish

VIENNA (Reuters) -Iran and world powers resumed talks on Monday after a five-month hiatus to try to salvage their 2015 nuclear deal but with Tehran sticking to its tough stance and Western powers warning that will not work, hopes of a breakthrough appeared slim.

Diplomats say time is running out to resurrect the pact, which then-U.S. President Donald Trump abandoned in 2018, angering Iran and dismaying the other powers involved – Britain, China, France, Germany and Russia.

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Six rounds of indirect talks were held between April and June. The new round formally began with a meeting of the remaining parties to the deal, without the United States, shortly after 1400 GMT.

The meeting in Vienna ended an extended break triggered by the election of hardline cleric Ebrahim Raisi in June as Iran’s president. The talks are effectively indirect negotiations between Tehran and Washington since Iran refuses to meet face to face with U.S. envoys. Other officials shuttle between them.

Tehran’s negotiating team has set out demands that U.S. and European diplomats consider unrealistic, Western diplomats say.

“Our demands are clear. Other parties and especially Americans should decide whether they want this deal to be revived or not. They abandoned the pact, so they should return to it and lift all sanctions,” an Iranian official close to the talks told Reuters.

Iran has adopted an uncompromising position by demanding removal of all U.S. and European Union sanctions imposed since 2017, including those unrelated to its nuclear programme, in a verifiable process.

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“The United States still fails to properly understand the fact that there is no way to return to the deal without a verifiable and effective lifting of all sanctions,” Iranian Foreign Minister Hossein Amirabdollahian said in a statement shortly after the talks resumed.

“The return of the U.S. to the nuclear deal would be meaningless without guarantees to prevent the recurrence of the bitter experience of the past,” he said. “This opportunity is not a window that can remain open forever.”

TENSIONS

In parallel, Tehran’s conflicts with the U.N. atomic watchdog, which monitors its nuclear programme, have festered.

As Iran has advanced its uranium enrichment, the International Atomic Energy Agency says its inspectors have been treated roughly and refused access to reinstall monitoring cameras at a site it deems essential to reviving the deal.

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“If Iran thinks it can use this time to build more leverage and then come back and say they want something better, it simply won’t work. We and our partners won’t go for it,” U.S. envoy Robert Malley told BBC Sounds on Saturday.

Since Trump took the United States out of the deal, Iran has breached many of its restrictions meant to lengthen the time it would need to generate enough fissile material for a nuclear bomb https://www.reuters.com/news/picture/explainer-what-remains-of-the-iran-nucle-idUSKBN2ID0E4. Iran says it wants to enrich uranium only for civil uses.

Malley warned that Washington would be ready to ramp up pressure on Tehran if the talks collapse.

Diplomats have said Washington has suggested negotiating an open-ended interim accord with Tehran as long as a permanent deal is not achieved. Several Iranian officials told Reuters Iran had no intention of accepting an interim deal.

Iran’s arch-enemy Israel, which opposed the original deal as too limited in scope and duration, has said military options will be on the table if diplomacy fails.

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“They (Iranians) will play for time, earn billions from the removal of sanctions, continue to deceive the world, and covertly advance their nuclear programme,” Israeli Foreign Minister Yair Lapid told reporters in London https://www.reuters.com/world/middle-east/israels-lapid-urges-world-keep-up-pressure-iran-2021-11-29.

“The intelligence is clear. It leaves no doubt.”

(Writing by John Irish and Parisa Hafezi Editing by Mark Heinrich)

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U.N. chief concerned about southern Africa isolation over Omicron

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November 29, 2021

By Michelle Nichols

UNITED NATIONS (Reuters) -U.N. Secretary-General Antonio Guterres said on Monday he was deeply concerned about the isolation of southern African countries after COVID-19 travel restrictions were imposed by several countries over the new Omicron variant of coronavirus.

“I appeal to all governments to consider repeated testing for travelers, together with other appropriate and truly effective measures, with the objective of avoiding the risk of transmission so as to allow for travel and economic engagement,” Guterres said in a statement.

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The Omicron variant of coronavirus carries a very high global risk of surges https://www.reuters.com/world/spread-omicron-variant-forces-nations-rethink-plans-global-travel-2021-11-29, the World Health Organization warned on Monday, as more countries reported cases.

Omicron was first identified in southern Africa and many countries, including the United States and Britain, have announced travel curbs and other restrictions on the region. Africa has some of the lowest COVID-19 vaccination rates worldwide due to a lack of access to doses.

Guterres has long warned about the dangers of vaccine inequality around the world and that low immunization rates are “a breeding ground for variants.”

“The people of Africa cannot be blamed for the immorally low level of vaccinations available in Africa – and they should not be penalized for identifying and sharing crucial science and health information with the world,” he said.

(Reporting by Michelle Nichols; Editing by Dan Grebler)

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Belarus announces military drills with Russia near Ukraine border

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November 29, 2021

MOSCOW (Reuters) – Belarus on Monday announced joint military drills with close ally Russia on its southern border with Ukraine and accused the NATO military alliance of building up offensive capabilities near its borders.

U.S., NATO and Ukrainian officials say Russia has built up forces near Ukraine, sparking fears of a looming attack. Moscow denies any such plan. Belarus is itself locked in a row with the European Union over migrants camped at its western border.

Casting it as a response to new military deployments in countries to the west and south of Belarus, Defence Minister Viktor Khrenin said Minsk would hold an exercise with Russia in the “medium term”. He gave no specific date.

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“We see troop formations around our state borders… We can only be concerned by the militarisation of our neighouring countries, which is why are forced to plan measures in response,” he said in comments on his ministry’s website.

NATO member Lithuania, which lies to the west of Belarus, said on Sunday the Atlantic alliance needed to adjust its stance towards Belarus, whose military, it said, was becoming more integrated with Russia’s armed forces.

On Monday, Belarusian leader Alexander Lukashenko said Minsk would not sit idly on the sidelines if the simmering conflict in eastern Ukraine erupted or a war broke out with the West at Russia’s borders.

“…it is clear whose side Belarus will be on,” he said in a clear nod to Russia, whose financial and political backing helped him weather huge protests against his rule that broke out last autumn.

“They understand this, that’s why they’ve begun strengthening their northern Belarus-Ukraine border,” Lukashenko was quoted as saying by Interfax news agency.

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The comments appeared to contrast with the more neutral stance taken by Lukashenko after Russia’s 2014 annexation of Crimea from Ukraine and its backing for separatist forces in Ukraine’s east.

Minsk, like most of the world, still recognises Crimea as Ukrainian territory.

(Reporting by Maxim Rodionov; Writing by Tom Balmforth; Editing by Gareth Jones)

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