Climate change looks set to remain the top theme for most responsible investors in 2021, not least because of COP26 – the global climate negotiations now scheduled to take place in November in Scotland. Slated to be the biggest since the Paris Agreement was achieved in 2015 at COP21, the summit is expected to see the world’s governments submit new and improved climate commitments (although nearly two-thirds of them missed the December deadline), and finance will feature more heavily than ever. The EU was supposed to unveil the next phase of its sustainable finance agenda in December, but it is now scheduled for March. It’s expected to be even more ambitious than the Action Plan on Sustainable Finance from which the current green taxonomy, disclosure rules and climate benchmarks grew, and will probably cover new topics such as due diligence rules for board directors, supply chain transparency and the possibility of regulating ESG ratings providers. 2020 was huge for data and disclosure. As RI discussed last month, it was the year when players including BlackRock, Microsoft, State Street, Allianz and S&P waded in to try and steer ESG data developments in the market. 2021 is already proving to be a make or break year for ESG (among other things) in the US: as the Trump Administration continues to try and rush through rules to limit the spread of sustainable investment, incoming President Biden has promised that, in less than a fortnight – on his first day in office – the largest economy in the world will rejoin the Paris Accord. Nasdaq is currently asking for permission from the US regulator to obligate the companies listed on its marketplace to have two “diverse” directors, and to disclose more on race and ethnicity.

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