FINANCE051Climate Change, the Investor Network on ClimateChange and UNEP Finance Initiative, the negotiatorswere in no mood to listen to private finance or the arrayof capital market actors gathered with the other 40,000international visitors in Copenhagen.By the first Thursday of the two-week meeting, the"writing was on the wall" for the financial servicecommunity's aspirations that a meaningful dialoguewould take place. A senior negotiator for the EuropeanUnion captured the critical issues for finance andcapital market actors when he explained: "Any effort tointroduce private finance or even point to capitalmarket mechanisms is seen by a significant group ofdeveloping countries as a co-ordinated effort to roleback Overseas Development Assistance. Also, the?

developing countries have very little faith left inwestern financial institutions and capital markets afterthe crash. It is as simple as that and you will not seeany reference to private finance in any communicationfrom Copenhagen."One week later, on 17 December, a group of theworld's largest asset owners1wrote a letter to the headsof government gathered in Copenhagen expressingtheir concerns. The two-page letter stated: "Amongst other issues, provision of private investmentand finance will be fundamental to the creation of aclimate resilient infrastructure that addressesconcerns at the heart of the challenges associated withadaptation to global warming and, notably, for thosechallenges already faced by the most vulnerabledeveloping countries. It appears that, at best, the roleof capital markets, private finance and the importanceof the vast concentrated pools of savings held in trustby institutional investors, has a most tentative footholdin the collective thinking of negotiators within theCoP15 discussions. At worst, private investmentmechanisms and capital markets may not bereferenced in a COP15 agreement, or subsequentagreements, for reasons of political expediency."Since Copenhagen, a number of things have happenedthat will work to change the way private finance andinvestment approach the climate change policy-making process. Firstly, the launch in February 2010by UN Secretary General Ban Ki-Moon of a High LevelGroup of 19 politicians and financiers to exploreoptions on how to finance multilateral andgovernmental commitments to climate changeAbove: Paul Clements-Hunt (left) and RobertTacon (right)052FINANCEmitigation and adaptation is a positive step that willgive hope to private financial services. The work andfindings of this group have given a sense that the roleof private finance and markets is not forgotten and willfilter into the UN policy process in a more focused wayfrom the highest political level.Secondly, the finance and investment groups, whileunderstanding the need to see and be seen at globalpolicy-making events such as the annual UN summits,have also come to appreciate the power of well tailoredand tightly targeted action towards policy-makers atthe national and regional levels. In terms ofrepresenting their case in the multilateral policyprocesses, notably the UNFCCC meetings, thefinancial services and investment community aredistinctly the "news boys on the block" compared withthe energy, utilities and carbon-intensive parts of th ebroader industrial and business community. In short,the financial services and investment community as acollective body were playing catch up in terms of globalpolicy-making politics. They have only come to "theparty" in the last few years and in contrast to otherindustry groups, were lagging way behind.Thirdly, all eyes in carbon finance and investmentcommunities will remain transfixed on the "ebb andflow" of hope and despair in the USA, with efforts bylaw-makers there to deliver a meaningful climate bill.Many informed observers within finance andinvestment are coalescing around two points: firstly,that no meaningful deal can come at the global levelwithout US domestic politics passing a solid climatebill and, secondly, that the likelihood of that happeningin 2010 has diminished. And with it, the hope for a