Last week at COP29, Allied Climate Partners, Climate Policy Initiative, Glasgow Financial Alliance for Net Zero (GFANZ), Sustainable Energy for All (SEforALL), and Three Cairns Group co-hosted a roundtable focused on The World Bank Private Sector Investment Lab’s (PSIL) key objective to elevate the role of equity and junior capital in climate finance.
We’re focused on building more robust analytics on where equity dollars are currently flowing, and where they need to flow, leading to a better prioritization of these resources — including the key role of catalytic equity and blended finance.
A big thank you to our co-hosts, partners, and participants that helped make this event a success.
Week 1 of COP29 has been marked by slow progress on finance and nature. But there’s hope! Ambitious new NDCs from Brazil and the UK showcase leadership and set the stage for more bold action.
Clare Shakya, Maria Netto, Balkissou Buba, Ann Samante, and Tom Skirrow share powerful reflections on the urgent need for increased funding for nature. Their call to action is clear:
🌿 25% of financing must reach Indigenous Peoples.
🌳 Funding for nature must triple by 2030 to meet the 1.5°C target and restore critical ecosystems.
With so much at stake, the time for promises has passed. It’s time for bold action
Unveiling COP Insights: #Sustainability#ClimateAction#ESG 🌍
3 Key Takeaways:
- Commitments to transition from fossil fuels and triple renewables by 2030 are monumental, yet adherence remains a concern.
- The establishment of an accountability mechanism, 'net zero data public utility,' marks a stride toward transparent commitments.
- Focus on climate physics and immediate emission sources like methane showcases a pragmatic approach to combat climate change.
Further Insights:
Historic Commitments
- Nations pledged to move away from fossil fuels and massively invest in renewable energy. The introduction of the Loss and Damage fund represents a significant step towards climate resilience and financial support for vulnerable countries.
Accountability Mechanism
- A new global, open source "net zero data public utility" will allow tracking of individual and corporate progress towards climate commitments. This mechanism ensures transparency and holds parties accountable, fostering a culture of responsibility and progress.
Methane Reduction
- Specific attention to methane emissions, which account for a significant portion of global emissions, highlights strategic targeting of climate change contributors. The initiative to engage major oil and gas producers to reduce methane emissions by 2030 underscores a focused and actionable plan.
Investment Shift
- A notable pivot in investment from fossil fuels to clean energy has been observed, with $1.8 trillion allocated to clean energy in the previous year. This shift not only represents financial reorientation but also a significant move towards sustainability goals.
Climate Finance
- Discussions on climate finance underscore the imperative to increase financial commitments, especially from wealthier nations. Achieving higher investment targets is crucial for supporting global climate initiatives.
Brazil's Role
- Brazil's upcoming presidency in the G20 and COP, combined with its ambitious ecological transformation plan, presents an opportunity to lead substantial progress in climate action, particularly in biodiversity and nature conservation.
Investor Appeal
- Despite market challenges, the clean energy sector continues to offer compelling investment opportunities, highlighted by substantial returns and positive environmental impacts.
Closing Thoughts:
The discussions elucidate both the advancements and the hurdles in the journey towards global sustainability. With ambitious commitments and innovative accountability mechanisms in place, how can businesses and investors further accelerate the transition to a low-carbon economy? The role of policy, combined with the strategic deployment of technology and finance, is pivotal in this endeavor. Reflecting on these insights, the question remains: how can each sector - government, corporate, and finance - amplify its impact to ensure the collective goals of COP are not only met but exceeded?
Sustainability Director, Private Debt I MSt candidate at Cambridge Institute for Sustainability Leadership I Trainee Board Member at Platform Housing Group
Calls to reform the international financial architecture to better support the achievement of the Paris Agreement goals are growing louder, as countries prepare for COP29 and their next round of climate targets, according to Aviva Investors.
Since the “step change” at COP26 that saw private finance assume unprecedented prominence in the discussions, successive UN climate conferences have gradually increased ambition and the issue should feature prominently at COP29 this year, Tom Tayler, Head of Climate Finance at Aviva Investors Sustainable Finance Centre for Excellence, told Environmental Finance.
Read here (under paywall): https://bit.ly/3B7oUcr#Climate#COP29#ParisAgreement
The Climate Investment Funds (CIF) announced a $1 billion investment to accelerate the decarbonization of industrial sectors like cement, steel, and chemicals in developing countries. The initiative, supported by the World Bank and other global lenders, aims to reduce emissions in high-demand sectors as part of efforts to meet global climate goals. The program will fund cleaner technologies and open opportunities for public-private collaboration. #ClimateAction#Decarbonization#DevelopingCountries#CleanEnergyTransition
There's a need to advocate and engage with financial regulators and policy makers;
1. For the expansion of green lending projects to accelerate the transition to a low carbon economy & promote sustainable development.
2. Establish regulatory frameworks supporting green finance & create an enabling environment for sustainable development and investment.
#Cop29#NetZero#ClimateFinance#CarbonMarkets
Latest estimates from the Climate Change Committee suggest that we will need to invest around £50bn every year to deliver Net Zero by 2050 in the UK. An evergreen investment theme coupled with large potential pools of funding will be music to the ears of PE dealmakers.
For GPs however, allocating capital to companies that participate in the Net Zero transition is no mean feat. Net Zero markets present unique structural challenges: nascent technologies, immature processes, constantly changing funding and regulations, and last but not least, a fundamental lack of scaled, high-quality assets. While these challenges come with risks, they also present potential opportunities.
In our latest Market Intelligence report by Matthew Harrison, we outline key pitfalls for those investing in the Net Zero transition, and how CDD can give investors an edge during the diligence process and beyond. #NetZero#EnergyTransition#CommercialDueDiligence#CDD#PrivateEquity#DueDiligencehttps://lnkd.in/epeWRHdg
As the COP29 negotiations are ongoing, I had the occasion to participate and reaffirm Proparco’s deep commitment to climate action and highlight the importance of climate finance, to promote sustainable development.
Significant achievements I climate finance : Proparco reached record levels of climate finance in 2023, committing €1.13 billion, contributing to the AFD Group’s total of €7.5 billion in climate finance. This includes over €200 million dedicated to adaptation, a significant growth over the past years and an increasingly relevant theme for our clients and partners.
We are on track for another very strong year of climate finance delivery in 2024 in support of the work of our clients, including with a focus on further raising the quality of climate finance, as illustrated by the following examples:
o Fostering resilience : Africa’s first Sustainability-Linked Loan (SLL) with Ecobank: move towards climate transparency and resilience in banking. €200 million loan includes targets for climate strategy and data transparency, setting a precedent for impactful financing in the financial sector.
o Commitment to deliver high-impact solutions, we’ve supported flagship projects such as:
- The Riverside solar and battery project in Uzbekistan
- The textile recycling project in Turkey, with Sanko
At Proparco, we are proud to support impactful initiatives as showcased in COP29 and continue to advocate for sustainable finance solutions, foster climate resilience and support a just transition globally.
"The outcomes of COP29 and the actions of the private sector will have a significant impact on the future of sustainable finance."
Financing #climatechange policies and initiatives is on the agenda for #COP29. We look at the role of the private sector in mobilising financial resources for resilience building, scaling innovative solutions and promoting sustainable practices.
https://lnkd.in/efyJXYzh
🎯 New guidance on objectives and targets to supplement the Net Zero Investment Framework 2.0 is now live!
Split into six sections, this includes detailed support for investors setting their individual portfolio level objectives and asset level targets, recommendations on attribution analysis and rebaselining, scope 3 clarifications and much more.
💡 We explore the repositioned Portfolio Decarbonisation Reference Objective and how it can be applied across asset classes, including for sovereign bonds.
Section six outlines the listed equities and corporate fixed income asset class alignment and engagement threshold targets.
🔎 And look out for detailed case studies from our members, addressing key topics covered by the guidance and highlighting how they vary based on individual net zero strategies.
Read section 1 below and follow this link to get the most from NZIF 2.0:
👉 https://lnkd.in/epV8EHNs#NetZero#NZIF#Investing#COP29
