Investing in climate change goals is a win for investors and developing countries that have suffered many setbacks and require more funding to meet their climate targets.
This sentiment was shared by Egypt’s Planning and Economic Development, Dr Hala El Said, at a roundtable discussion at COP28 in Dubai on Day Five — Finance Day — when concessional finance was identified as crucial for developing countries to achieve their goals.
El-Said said that most countries, especially those in sub-Saharan Africa, had already missed their Sustainable Development Goals (SDGs) targets because of various problems like COVID-19, geo-political instability, and inflation.
Despite the missed targets, Egypt has integrated the Green Economy into its climate adaptation and mitigation programs. The United Nations Development Fund (UNDP) describes Green Economy as a low-carbon, resource-efficient, and socially inclusive economy where jobs are created, income is driven by public and private investment towards infrastructure and assets that will lead to the reduction of pollution, carbon emissions and the prevention of the loss of biodiversity.
“We started with integrating green transformation into our investment plan. We started it by training people in public institutions on how to integrate green attribution in all our areas. We then committed to making sustainable green cities, and Egypt now has 34 sustainable cities,” said El Said.
She added that the public/private partnership had been enhanced over the years to align with the country’s developmental goals. This was especially important because the government would not manage to meet the goals on its own. The government’s role was critical in developing the criteria and standards essential for the ecosystem.
“We need more concessional finance and investments. International institutions need to realize that it is a win-win situation because if you look into most developing and developed nations, specifically the African continent, we have all the right ingredients for transformation. We have the wind, sun, and talent to support this initiative,” said El Said.
Alignment of climate funding
Assistant Secretary General and United Nations Development Programme’s Regional Director for Arab States, Dr Abdallah Al Dardari, said private and public sectors needed to ensure their climate change projects aligned.
Amid all the excitement over the establishment of the Loss and Damage Fund, which aims to provide financial assistance to nations that are vulnerable to climate change disasters, Al Dardari cautioned countries to ensure that the fund was not “repackaged” from previous funding but was a new one.
“We need to be very clear about ensuring these states are not just repackaging existing funding. For example, when we talk about achieving the 100 billion-dollar funding, we need to make sure that it is a new efficient 100 billion dollars being delivered,” said Al Dardari.
He also said that private investors needed to be aware that investment in climate change projects took time not only to implement, but the return on investment also took time, requiring them to align their timelines based on the projects they were investing in.
Companies must improve climate awareness
Even though private companies are speaking about investing in climate change and seem to be aware of its implications on their businesses, the Global Sustainability Markets Leader at Price Water Coopers (PWC), Renate de Lange-Snijders, said that chief executives lack the understanding of the negative impact that climate change would have on their businesses.
A survey by PWC established that up to 50 percent of CEOs expected a moderate or huge impact from climate change in the next 12 months, while 24 percent worried about climate-related damage to their physical assets. Climate change also came in 5th and below on issues that they were concerned about
“They are all part of the bigger ecosystem and need to look at how to mitigate the impact of climate change but also look at how to respond to the loss and damage as well as how they can make their companies have a sustainable, resilient model where they can look at the finance returns as well as the good impact,” said de Lange-Snidjers.
The transition will require collaboration between multiple stakeholders, finance, and the upskilling of people. This will further require balancing for companies to meet their business objectives while doing good for the climate change strategies of the countries in which they operate.
Marcia Zali is a South Africa-based freelance journalist specializing in health and science reporting.