It’s easy to be cynical about next week’s COP26 Gabfest, but we could all be winners if global leaders successfully optimise for a cleaner decarbonised environment and a global growth economy based on new clean technologies, but we need time for the transition from fossil fuels. If we fail to do so, the alternatives are bleak.

Markets are never as bad as you fear, but never as good as you hope. The Threat Board has seldom looked so complex: we can try to predict outcomes, but its notoriously difficult. The list of potential ignition points seems to be expanding exponentially: Energy Prices, Oil, Inflation, Stagflation, Supply Chains, Recession, China, Politics, Consumer Sentiment, Business Confidence, Property Markets, Liquidity, Bond Yields, Stock Prices.. you name it and someone is worrying about it.

Stock markets look to have shrugged off this week’s dip despite the likelihood of rising interest rates and the end of QE programmes – the dreaded “Taper” – next year. Markets look calm, but the equinoxal gales are coming as traders focus increasingly on the inflation vs stagflation outlook. There is increasing uncertainty on everything from China, German Elections, to Supply Chains.

ESG is a marvellous concept appallingly executed. To understand how it’s gone wrong I recommend Tariq Fancy’s rant about his time as Sustainability CIO at Blackrock. To figure out how we actually deliver climate-change mitigation, social amelioration and better corporate governance, and avoid these lofty concepts being hijacked and suborned by business and finance interests, we need to replace the carrot of ESG with the stick of Carbon Taxes and Corporate Legislation. Time to get real and dispense with ESG claptrap.

The UN has declared a Code Red Climate Emergency. As we all know addressing climate change has enormous implications for investment strategies, but can governments collectively deliver the joined-up and effective policies required to save the planet? The jury is out…

Markets have entirely recovered after their wobble earlier this week, but it’s based on a simple belief: central banks will stand behind markets. Investors are increasingly convinced inflation threats are irrelevant – and they are wrong to do so. Inflation risks are growing from immediate climate change, the costs of rising environmental instability and inflation leaching out of financial assets into the real economy.

Its “Freedom Day” in the UK, but it feels same as, same as. Bond markets look stressed, but freak weather is raising the probability government intervention dwarfing the scale of the pandemic may become necessary. There will not be a gradual, ordered progression to a new higher temperature climate.  Instead… the reality looks like high-cost chaotic freak-weather events becoming increasingly common.  The cost could hit trillions.

The dramatic global weather seen in June could be a wake-up call for us all. Green-bond huggers and ESG-compliant investment committees are determined to do the right thing to get us carbon neutral by whenever, but the climate crisis may be upon us now… which means we need immediate solutions – like insurance and how to mitigate the enormous and escalating potential costs of weather events like “heat-domes”, storms, flood and drought. Today. Not Tomorrow.  

Finally, proof Football is more deadly than Tennis. And, as the UK proudly climbs onboard the Gigafactory bandwagon, are we heading for a Hindenburg Moment?

The International Energy Authority (IEA) is grabbing all the climate change headlines with its demands for Carbon Zero by 2050 and increased spending on renewable energy. The IEA now represents the consensus – the received wisdom. How achievable are their targets? Or will economic reality and rising costs of climate abatement result in something very different? It’s easy to demand neutrality – but will be frighteningly difficult to achieve.