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The United Nations Climate Change Conference (COP28) closed this past Wednesday, December 13th 2023, with an agreement that presented a roadmap for the transition away from fossil fuels. Signaling the “beginning of the end” of the fossil fuel era, the agreement lays the groundwork for a swift and equitable transition, with an overarching aim to keep the global temperature limit of 1.5°C within reach. But why?

According to the latest IPCC synthesis report, human activities, principally through the emission of greenhouse gases (GHGs), have unequivocally caused global warming; resulting in widespread adverse changes in the atmosphere, ocean, cryosphere, and biosphere. Without a doubt, fossil fuels – namely coal, oil, and gas – are by far the largest contributor to global GHG emissions (over 75%). Thus, it is clear that a transition away from fossil fuels is a necessary step in the fight against climate change.

With this in mind, it is also important to understand that the transition away from fossil fuels aligns with several of the UN’s Sustainable Development Goals (SDGs), particularly SDG 7SDG 12SDG 13SDG 14, and SDG 15.

Click each SDG to find out how.

Goal 7 is about ensuring access to clean and affordable energy, which is key to the development of agriculture, business, communications, education, healthcare and transportation. For many decades, fossil fuels have been a major source of electricity production, but, as discussed above, contribute to the emission of GHGs. Thus, moving forward, countries must transition away from fossil fuels, to rather invest in renewable energy resources, prioritize energy efficient practices, and adopt clean energy technologies and infrastructure.

Goal 12 is about ensuring sustainable consumption and production patterns, which is key to sustain the livelihoods of current and future generations. While growing global populations continue to consume at limitless rates, our planet is rapidly running out of natural resources. We need to change our consumption habits, and shifting our energy supplies (fossil fuels) to more sustainable ones (renewable energies) is one of the main changes we must make if we are to reduce our consumption levels.

Goal 13 is about moving towards climate-resilient development, while outlining a clear path to achieve net-zero emissions. As discussed above, fossil fuels are responsible for the vast majority of GHG emissions, and consequently, the various negative impacts of climate change. As such, net-zero climate development cannot feasibly be achieved without a transition away from these sources.

Goal 14 is about conserving and sustainably using the oceans, seas and marine resources. Important here is the acidification of the ocean, which stems from the same root as the climate crisis: GHG emissions driven primarily by fossil fuel-based energy systems. Ocean acidification creates deadly conditions for marine life such as oysters, clams, lobsters, shrimp, coral reefs, and more. In order to protect these life forms, a transition from fossil fuels is thus necessary.

Goal 15 is about protecting and promoting the sustainable use of terrestrial ecosystems. At every stage of production, fossil fuels directly contribute to global biodiversity loss through the emission of GHGs and the destruction of critical natural habitats. Therefore, in order to meet SDG 15 and protect global biodiversity, the world must initiate a transition from fossil fuels.

Moving Forward: Clear Skies Investment Management Vision

 

Taking into account both COP28’s recent agreement and its relationship to several SDG goals, Clear Skies intends to enact a positive impact on the environment and society. It is for this reason that we do NOT invest in fossil fuels. Instead, using a data-driven approach, Clear Skies measures portfolio companies’ delivery on the SDGs (see our investment strategy here). This commitment ensures that your investments actively support initiatives that promote renewable energy, responsible consumption, climate resilience, and equitable, thriving communities in line with the SDG targets.