Experts hope COP28 will lead to a rise in green investments and a tougher stance on greenwashing.
The annual climate summit started on Thursday (November 30) in Dubai.
On Friday (December 1) UAE President, Sheikh Mohammed Bin Zayed Al Nahyan, announced a $30bn (£23.6bn) climate fund that aims to attract $250bn (£197.3bn) of investment by the end of the decade.
Guillaume Gassmann, fund manager and manager analyst at La Financière Responsable (LFR), said now is the time for funds to show they are strict and show their investment is "truly sustainable".
He added: "Sustainable investment has sparked a lot of interest, but as time passes, many asset management companies are falling into greenwashing and marketing rather than investing sustainably.
"This future for ESG investing is bright, but it’s time to go one step further and show that firms really are investing sustainably, taking into account how strict regulation is.
"Regulation is key to understanding what ESG investment is and having greater transparency in products, differentiating those that are truly sustainable from other greenwashing efforts, so it's okay to create common frameworks and indicators."
His comments come the week after the Financial Conduct Authority announced a new package of measures which includes an anti-greenwashing rule for authorised firms, four investment labels and new rules and guidance for the marketing of investment funds on the basis of sustainability characteristics.
An update from AXA investment managers on conference said the firm’s expectations for the outcomes of the climate summit are “limited”.
It said: “We hope the controversies related to the COP28 presidency prove wrong, and if we do not see a decisive move towards a gradual decline in fossil fuel production, that at least COP28 should mark critical progress towards wind and solar through underlying energy infrastructure investments.
“As investors, we cannot replace government action. However, we will continue to push for more government action through advocacy, while engaging with the private sector so that across the board, it reduces emissions and contributes to changing the whole ecosystem and demand patterns.”
While John Plassard, senior investment specialist at Mirabaud Group, said financing a solution to climate change is controversial but there are ways investors can put money into this.
He gave the example of investing in solar panels, which could become mandatory on all new buildings in the EU under new regulations.
Plassard added: “To say that COP28 will be a game-changer would be to lie to you. However, without the COP process, many of us would be unaware of global warming. We absolutely must keep up the fight (and it is a fight) to avoid the worst for future generations.”
tara.o'connor@ft.com
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