It is clear the COP21 climate change summit was a diplomatic success in the face of powerful vested interests lobbying hard to prevent progress.

But it is apparent that official processes can develop narratives that keep the powerful content. The International Energy Agency’s World Energy Outlook (2015) being an example. And with regard to COP21, there remains a big gap between what needs to be done and what is likely to be achieved in the next 5-10 years. The real risk of a success narrative is that we have pacification and an unhelpful fudge. 

So how are investment narratives playing out? 

As with COP21, the situation is ‘both, and…’. There are very positive developments. But there is a clear trend to hype developments. Portfolio decarbonisation is allegedly transforming the markets. Green bonds are growing exponentially. The market is now valuing disclosure. This is not new. This positive outlook on environmental, social and governance (ESG) questions has being going on for 15 years.

As the founding chairman of Institutional Investors Group on Climate Change I was at the start of getting investors to engage with climate. And being ‘positive’ was what we did too. 

But given how this ‘growth’ has happened over the past 15 years, it is clear that making money from climate change is not good enough. The main question is what investor strategy is most fit for purpose. That is, what will be most effective and most help us get back to a maximum global temperature rise of 2°C above pre-industrial levels? 

So here is one practical idea. Let’s change the question people are asking about COP21. Namely was it a success or not?

A more useful question is what will COP21 allow us, individually and organisationally, to do differently? That is what can we now do that we were not able to do before? This question applies equally to individuals, non-governmental organisations, grant-making foundations, United Nations agencies, companies, investors and governments. 

For investors, the conclusion should be forceful stewardship. Post COP21, investors should be requiring companies to publish and implement their 2°C transition plans. This will create real demand for renewables and catalyse the energy transition. Of course, this depends on getting fund managers to engage but this is possible using resolutions at annual general meetings where votes are public. 

In terms of narratives, the focus today is on divestment, decarbonisation and green funds rather than on stewardship. Divestment is politically useful (but it shifts ownership of greenhouse gases from investors who care to those that do not). Decarbonisation is a technological version of the same strategy that fits with traditional investor risk management strategies. 

The challenge today is there is no constituency calling for forceful stewardship by investors. Hence, this narrative remains the least favoured option. Meanwhile, the kind of engagement that happens every day is often counter-productive. 

So back to the key question: what should be done differently post COP21?

Raj Thamotheram is CEO of Preventable Surprises and a visiting fellow at the Smith School, Oxford University