As world leaders begin their descent on Glasgow, we’ve rounded up the key forces and factors likely to demand attention throughout the imminent COP26 event.

Drawing leaders from across the globe, the conference is set to see the likes of David Solomon, Jamie Dimon, Larry Fink, and Stephen Schwartzman, among many others, participate in the event’s proceedings. Quoting an official familiar with the conference, the FT stated that “this is being held to make deals happen, you won’t be invited unless you are a trigger puller with either something to build in the UK or a deal to be struck.”

Keen to secure COP26 headlines, a raft of deal announcements and commitments are anticipated to be unveiled throughout the event, capitalising not only on the heavy media attention, but the gravitas that is associated with the occasion. While we aren’t expecting to be treated to the company of Xi Jinping, the presence of world leaders including Boris Johnson, Joe Biden, Justin Trudeau, Emmanuel Macron, Narendra Modi and several more will lend an official air to the proceedings.

While ‘everybody who is anybody’ will be present at the event itself, Finextra will be reporting from the conference, ensuring you get the key updates live from the heart of the affair. Below we’ve compiled a handful of core topics expected to be canvassed throughout COP26, which we will investigate as the event unfolds.

Nationally Determined Contributions (NDCs) and the Carbon Budget 6

The ‘NDC’ hot topic will be front and centre during COP26, as pressure to increase commitment levels builds. The NDC plan under the Paris Agreement relates to the amount of greenhouse gases each nation is emitting. The UN states that the plans in their current form are not sufficient to keep global warming to 1.5° Celsius about pre-industrial levels.

In fact, the United Nations Framework Convention on Climate Change’s (UNFCCC) update on its NDC Synthesis Report collectively put the world on track for 2.7° Celsius of global warming by the end of the century.

Earlier this week, Alok Sharma, incoming COP26 president, stated that countries must take more ambitious action on emissions, and they must act now.

If countries deliver on the 2030 NDCs and net zero commitments which have already been announced, observed Sharma, we will be heading towards average global temperature rises of just above 2° Celsius. “Analysis suggests the commitments made in Paris would have capped the rise in temperature to below 4° Celsius."

“So there has been progress, but not enough. That is why we especially need the biggest emitters, the G20 nations, to come forward with stronger commitments if we are to keep 1.5° in reach over this critical decade. Glasgow must launch a decade of ever-increasing ambition. At COP26 we must come together for ourselves, future generations and our planet,” Sharma emphasised.

The UK’s Carbon Budget 6 forms the basis of its NDC to the Paris Agreement, and is more ambitious than its fourth and fifth predecessors. It rectifies strategy which would have meant the UK missed its target by over one billion tonnes of carbon by 2037.

Leading international efforts in the push toward net-zero, we expect that UK rhetoric throughout the event will be squarely focused on calling out weaker commitments, and firming up relations with the private sector’s Multilateral Development Banks (MDBs), the IMF and the World Bank.

Making practical changes on an everyday basis to tackle climate change will also be highlighted during COP26’s session on day three: ‘How your wallet could save the world’, which calls on individuals to leverage their power to vote with their wallet. This trend underscores the need for banks to cater to and increasingly educated and sustainably-driven clientele in order to retain customers.

The big emitters

Following significant coverage of Xi Jinping’s expected absence at COP26, French President Emmanuel Macron spoke with the leader of the People’s Republic of China, urging the country to publish its determined contribution at the national level, and give a decisive signal by raising its level of ambition, and progressing concretely on the exit of coal.

China is a leading carbon emitter and while it has pledged to become carbon-neutral by 2060, it has not yet submitted a climate target.

The world’s third biggest emission producer, India, is expected to come under significant pressure to commit to more drastic emission reductions and set a target date by which to become carbon neutral.

In anticipation of next week’s onslaught of attention, Turkey’s President Tayyip Erdogan, also expected to be in attendance, signed a memorandum of understanding on Wednesday to receive loans worth $3.2 billion to help it meet clean energy goals set out in the Paris Agreement. The country is the last member of the G20 group to ratify the Paris Agreement.

Australia’s Prime Minister Scott Morrison has also been criticised for only confirming his attendance at the conference last week, and recent publicity around leaked documents that reportedly show that Australia sought to “change a major international report on climate change,” have not helped Australia’s image. The country is one of the largest carbon emitters on a per capita basis due to its heavy reliance on coal.

The leaked documents reportedly show efforts to water down the language of the report, and in one instance, a government official objected to a paragraph calling for the halt of new coal-fired power stations, and retirement of existing coal plants.

In response to this news, a spokesperson for Energy and Emissions Reduction Minister Angus Taylor, stated that the leaks mischaracterised Australia’s position and the process itself.

“All governments are invited to comment on draft IPCC reports as a matter of process […] All comments received by the IPCC are published with their reports as they are finalised. This ensures complete transparency.”

While Australia has committed to a 26% cut to its 2005 emissions by 2030, experts say it needs to commit to a 47% cut by 2030 if it is to meet the UN goal of keeping temperature rise below or within 1.5° Celsius. Earlier this week the Prime Minister stated that Australia will not announce an increase to its 2030 goal, which will likely become a point of criticism throughout the event.

Despite this, Boris Johnson responded to the news with congratulations, stating that the move “was very difficult for Australia because Australia is very heavily dependent on coal, on lots of carbon-producing industries, and they’ve done a heroic thing.”

Having already faced slights from the likes of the Royal Family on the subject, we imagine that the COP26 summit may make for slightly awkward attendance for Mr Morrison.

Room for improvement: enhancing data quality

Early October saw the release of the first biennial progress report, which assesses the developments made since UN Secretary General Atonio Guterres launched the UN Principles for Responsible Banking in 2019.

The Collective Progress Report covers the activity of what is now a community of 250 banks, which together manage 40% of global banking assets and serve 1.6 billion people. The report examines how financial institutions are integrating sustainability into their business strategies, and sets a baseline to measure future progress.

Key findings from the report show early signs of progress:

• 94% of banks identify sustainability as a strategic priority for their organisation,
• 93% are analysing the environmental and social impacts of their activities, and
• 30% are setting targets, with a strong collective focus on climate and financial inclusion.
• The report finds early indications of impact on the real economy, with USD 2.3 trillion of sustainable finance being mobilised.

While financial institutions are making progress, the UN Environmental Programme Finance Initiative (UNEP FI) argues that continued and accelerated action is still needed from signatories. One suggested area for financial institutions to improve is enhancing the availability and quality of data and setting targets in line with improved impact analysis.

The report notes that many banks lack the ability to track and measure progress due to the limited availability and quality of internal and external data.

“They must therefore work together and with stakeholders to increase the availability of shared knowledge sources and agree on approaches where data is not available, such as using national averages or appropriate proxies. Banks must also improve corporate disclosure and management of available data in order to address this challenge.”

French financial regulators recently criticised banks, insurers and asset managers across the country for their vague pledges for change on climate. In a joint report from the Autorite des Marches Financiers (AMF) and the Autorite de Controle Prudential et de Resolution (ACPR) the regulators stated that the financial industry must agree on common definitions to measure its exposure to fossil fuels, which include banks’ entire value chain.

On day two of COP26, scientists and innovators will explore how they can create technical solutions to solve complex climate challenges during the session ‘Be part of the solution: How research and innovation is tackling climate change.’ These researchers are contributing to the pool of evidence which informs climate policy and represent an integral part of the practical determination to achieve net zero carbon emissions.

‘The Economics of Climate Change’ session will also take a practical approach to climate resolutions, screening a short film that shows how economics is a study of positive trade-offs, and is fundamental in bringing solutions and technologies to market.

The push for consistency, and efforts to prevent financial institutions from avoiding concrete, finite, definite terms is likely to become a theme of COP26, as banks which may in other circumstances feel confident boasting their efforts, may feel a little more heat from counterparts and spectators unwilling to stomach the exhausting rhetoric.

As Queen Elizabeth II recently made clear, there is nothing more “irritating” than leaders who “talk, but don’t do.”