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What Happened at COP26

As the leading global institution, the United Nations is central to combating one of the most pressing global challenges: climate change. Each year, the UN holds a Conference of the Parties—its annual COP—to assess progress on the issue. The first COP took place in 1995.i Since then, the climate crisis has intensified rapidly. The global climate response has intensified, too, though action still needs to ramp up significantly.

COP26 took place from October 31 to November 12, 2021 in Glasgow, United Kingdom. One of Domini’s fundamental goals is ecological sustainability, so we were very interested in the ways COP26 might guide government action, influence corporations’ plans and performance, and help deploy investments that support climate change mitigation and adaption. Here’s a high-level look at some key outcomes.

Greenhouse Gas Emissions

Background

Climate change is enormously complex, but the global imperative can be put simply: to cap heating at 1.5 degrees Celsius.ii From there, we’re able to calculate what greenhouse gas emissions reductions are necessary to avert the worst impacts and keep us within that budget. COP26 underscored a global consensus: methane emissions and coal use are two of the most detrimental contributors to climate change. Political will and action are needed immediately.iii

What’s the Latest

Methane is an extremely potent greenhouse gas, meaning one ton of methane heats the earth’s atmosphere more than, for example, one ton of carbon dioxide.iv Talks at COP26 led to the Global Methane Pledge, by which countries are aiming to reduce methane emissions by 30% by 2030.v And while coal remains a significant source of carbon emissions, more than 40 countries committed to shifting away from coal within the next 20 years. vi There was also significant progress on transportation-related emissions. 24 automakers announced an initiative to end the era of gas-powered vehicles by 2040 or earlier.vii

Obstacles

A few major methane emitters—China, Russia, and India, for example—haven’t joined the pledge.iii That same batch of countries, plus the U.S., was absent from the coal commitment.viii A last-minute intervention from India and China further weakened COP26’s coal objectives.ix And four of the world’s biggest carmakers decided against joining the vehicle emissions initiative.x

Forests and Oceans

Background

Temperature goals and emissions targets help simplify the climate crisis, but real progress means looking more closely at the world’s most powerful—and complex—ecosystems.

What’s the Latest

Healthy forests, especially tropical forests, are critical to achieving net-zero emissions and also ensuring adequate biodiversity.xi COP26 showed that nations are seriously ambitious about curbing deforestation. More than 120 countries signed onto a Declaration on Forests and Land Use, which lays out the goal of ending deforestation by 2030.xii The goal is accompanied by almost $20 billion in public and private funding,xiii as well as a commitment from over 30 financial institutions, including Domini, to do their part in ending commodity-driven deforestation.xiv COP26 also drew attention to the recently established Race to Resilience campaign. It aims to produce nature-based solutions—usually by strengthening ocean, coastal, or forest ecosystems—that increase climate resilience and adaption for 4 billion people by 2030.xv The push for many forest and ecosystem preservation measures has been led by Indigenous communities, who have provided vision and expertise on these aspects of climate resilience.xvi

Obstacles

Deforestation and ocean preservation measures are consistently popular at the international level, but follow-through has been a problem. That said, the deforestation pledge made at COP26 includes nations that haven’t been on board in the past, like Brazil and Russia.xvii

Finance

Background

Ultimately, financial support and pressure will help guide the world’s climate response. It’s crucial that the least developed nations get the financing they’ve been promised for climate change mitigation and adaptation work. Investors, banks, money managers, insurers, and financial regulators can enable progress on infrastructure, energy, and climate resilience projects and, more broadly, help restructure companies, institutions, and nations.

What’s the Latest

On the finance front, COP26 gave way to the Glasgow Financial Alliance for Net Zero.xviii Nearly 500 global firms—with $130 trillion at their disposal—pledged to do more to focus their work on combating climate change. If this coalition follows through, we will see, in simple terms, around a hundred trillion dollars go to projects that are accelerating the transition towards a decarbonized world.xix Another promising COP26 development is on the regulatory side. A new organization—the International Sustainability Standards Board—is being created. It will be tasked with creating global accounting and disclosure standards for companies’ greenhouse gas emissions and other climate and sustainability impacts.xx

Obstacles

There needs to be an unmistakable and complete shift away from fossil fuels, including its financing. Then, there needs to be solid consensus on what kinds of projects will drive the most progress. Improved global climate standards and disclosures, with accountability measures, will help with this.

Our Takeaway

COP26’s goals on methane, coal, forests, oceans, and finance may not be perfect, but they demonstrate unprecedented (and necessary) ambition. Goals aren’t guarantees, however, and pursuing them in earnest is a serious undertaking. Reaching them will require detailed plans, intermediate targets, significant funding, and continued international collaboration—as well as a much higher degree of accountability than we’ve seen in the past. The world is watching closely to see whether leaders will put the pieces together.

Meanwhile, Domini is using the power of finance to help investors, companies, and policymakers respond to the climate crisis. Curious about our approach? Check out what we’ve been working on in our latest Impact Update.



Before investing, consider each Fund's investment objectives, risks, charges and expenses. Contact us for a prospectus containing this and other information. Read it carefully.

The Domini Funds are not bank deposits, are not insured, and are subject to certain risks. The market value of Fund investments will fluctuate and you may lose money. The Domini Impact Equity Fund is subject to certain risks including impact investing, portfolio management, information, market, recent events, and mid- to large-cap companies risks. The Domini International Opportunities Fund is subject to certain risks including foreign investing, geographic focus, country, currency, impact investing, and portfolio management risks. The Domini Sustainable Solutions Fund is subject to certain risks including sustainable investing, portfolio management, information, market, recent events, mid- to large-cap companies and small-cap companies risks. The Domini Impact International Equity Fund is subject to certain risks including foreign investing, emerging markets, geographic focus, country, currency, impact investing, and portfolio management risks. Investing internationally involves special risks, such as currency fluctuations, social and economic instability, differing securities regulations and accounting standards, limited public information, possible changes in taxation, and periods of illiquidity. These risks may be heightened in connection with investments in emerging market countries. The Domini Impact Bond Fund is subject to certain risks including impact investing, portfolio management, style, information, market, recent events, interest rate and credit risks.

The Adviser’s evaluation of environmental and social factors in its investment selections and the timing of the Subadviser’s implementation of the Adviser’s investment selections will affect the Fund’s exposure to certain issuers, industries, sectors, regions, and countries and may impact the relative financial performance of the Fund depending on whether such investments are in or out of favor. The value of your investment may decrease if the Adviser’s or Subadviser’s judgement about Fund investments does not produce the desired results. There is a risk that information used by the Adviser to evaluate environmental and social factors, may not be readily available or complete, which could negatively impact the Adviser’s ability to evaluate such factors and Fund performance.

The Domini Funds are only offered for sale in the United States. DSIL Investment Services LLC (DSILD) distributor, Member FINRA. Domini Impact Investments LLC is the Funds' Adviser. The Funds are subadvised by unafilliated entities. 11/21


Check the background of DSIL Investment Services LLC and its investment professionals on FINRA's BrokerCheck. Before investing, consider the Domini Funds’ investment objectives, risks, charges, and expenses. View or order a prospectus. Read it carefully.

DSIL Investment Services LLC (DSILD) distributor, Member FINRA.

Domini Impact Investments LLC (Domini) is the Funds’ investment manager. The Funds are subadvised by unaffiliated entities.

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