Tag Archives: climate

SIGN OF THE TIMES: COUNTING DOWN FROM $90 TRILLION

Today, above the flickering red and green signs of company stock at the London Stock Exchange, appeared a new symbol: “Climate Finance Accelerator”.

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This sign, in this context, is a strong signal of a movement gathering momentum to shift countries and companies towards a low carbon, sustainable economy.  It marked the launch of the first Climate Finance Accelerator, a bold initiative bringing together countries and financiers to co-develop plans that can help counties transform their economies to mitigate and adapt to climate change.

Country delegations from Nigeria, Mexico, Columbia and Vietnam have been teamed up with London based financial experts and development banks to co-develop detailed investment plans for bankable projects in an intensive 5-day process. The CFA is the brainchild of serial climate change-makers Ian Callaghan and Tessa Tenant and was set-up together with PWC and Riccardo. It provides a structure to help countries attract the finance needed to meet the climate targets they set out in the Paris Agreement.

One can understand why this is attractive to the private sector, once the sheer scale of the finance gap becomes apparent – Sir Roger Gifford, speaking this morning, put the need at $90trillion. Mexico alone is looking for more than $100bn by 2030. Countries have already committed massive budgets and are looking to the sector for smart financing arrangements for further billions.

This mini-blog will follow the teams over the next few days and highlight some of the emerging themes, resources and ideas coming through that may be useful for others working in similar areas.

A few themes that emerged today, including:

The power of multi-stakeholder dialogue

Nanno Kleiterp, development financier, said “it’s all about learning to understand each other’s language”. Hans Verholme, supporting the Nigerian delegation, mentioned “It’s about merging conversations at national and international level”. The Mexico delegation, which had representation from Government, local banks and the guild of taxicabs, noted that by involving diverse stakeholders CFA-inspired conversations had already significantly progressed the agenda.

Similarity in sector focus

Of interest is the similar focus areas across counties; transport (specifically, electrification and shift from private to public modes), energy (implementation of renewable and efficiency measures) and agriculture (including smart agriculture and land-use shifts). This offers opportunities to learn from existing projects and for collaboration, knowledge-sharing and replication.

The management of risk

The CFA initiative removes the information asymmetry that raises the price on projects by making opportunities more transparent to the finance community in a language they understand. It also allows them to weigh up endogenous and exogenous risks and develop blended and specific solutions to address each of these. Ultimately this will (as Michael Lewis from Deutsche Bank pointed out), lead to suites of new products from these institutions. It is also noted that part of the bigger transformational journey will need to include insurance companies. A Government led initiative, like the Green Investment Bank, supports increased market confidence by showing intention, creating focus and offering first capital.

Link to development

As Nigeria said in their opening statement today “Climate and development are inextricably linked”. Climate projects have multiple co-benefits that make them attractive to counties. In the UK 430 000 people are already employed in the green energy sector and it is growing at more than 12% p.a. For Nigeria, the opportunity to create new value chains in agriculture will support food security and lower cost of imported food. All of the counties mentioned the projects discussed as an opportunity to increase access to energy and alleviate poverty.

A wide range of creative finance structures and solutions are already deployed

These are very diverse and include: green bonds, Green Investment Bank (UK), Green Investment Bank (Connecticut), Green Growth Fund, Denmark Climate Fund, charges on electric bills, cap ‘n trade, carbon credit, Climate Investor 1 Fund, and government guarantees. They all offer case studies for countries and finance professionals to learn from.

Finance is not the silver bullet

While this was listed as the most important barrier for countries to move forward with their plans, other factors that need to be addressed include: in country capability development, ensuring strong governance and legal frameworks and community engagement.

A great start! Ed Wells, of HSBC, said today that “the money is there. If we can create the structures, it will flow”. Today (Tuesday) we start in earnest creating those structures, with the country teams working at different banks on an immersive ‘deep dive’ into enabling environments and how to prioritise projects.

More to follow…

Want to learn more about what goes on at CFA17? Sign up for  our ‘NDC Financing Made Easy‘ webinar, which will expand on the outcomes and teachings.
Follow @Money4NDCs and #CFA17 on Twitter to stay up-to-date with the latest from the event.CFA
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A call for boldness

If Einstein is right and we can’t solve problems with the same level of thinking that created them, then our tentative shuffle forward as a society to answer the clarion call of climate change will never provide us with the chasm leap required to address an overheating world.

We shouldn’tbold be surprised at the tentative shuffle – we have designed our social mechanisms to maintain the successful status quo.  Businesses and governments are set-up to create stability – not to provide the breakthrough thinking required to solve the biggest challenges of our time. But, we can’t wait around for the odd start-up or crazy pioneer to radically reinvent our systems. Technology and Elon Musk will not save us.

We need to break through institutionalised mind-sets and deliver change within the frameworks of our existing social mechanisms. We need to harness the power of the biggest social constructs we have – businesses – to be able to unleash resources, at scale against our societal challenges.

And of course it is in the interest of business. How can these large transactional mechanisms survive in a world of shrinking resource base, dying customers and migrating employees? Climate change is in the words of Stern “the world’s greatest market failure”.  Of course, there is also the other side – the carrot if you like – for those who act sooner to create the capabilities, source the technologies and thereby realise the opportunities inherent in the future we are moving towards.

Yet anyone that has ever been on a diet or started a new fitness programme knows that change is really, really hard. And even harder when it’s herding many organisations and individuals towards a new outcome. Here are some thoughts to support business boldness:

  1. Join forces: More and more coalitions and collaborations exist to support businesses and the systems they operate manage a transition to a low carbon world. Whether it is as specific as refrigerants or materials or generic as a Sustainable Cosmetics Forum, opportunities exist to operate beyond traditional organisational boundaries and work together to make far-reaching changes.
  1. Set external targets: Nestle (in a rare case of providing exemplary role modelling) links its corporate goals to the SDG’s. Other companies, including Natura and Unilever are looking at the BCorp structure to provide an external framework to guide their business actions. It is of little use to have internal targets in a connected world. The ability of business to thrive is dependent on the health of everything around it.
  1. Set 100% targets: Ikea shifted the target of 50% FSC certified wood to 100% across all products. This provided such clarity for suppliers that the original goal of 50% was met 2 years early. Each purchase decision made by a large business (or government) sends a long ripple of influence through the world. Use it.
  1. Leverage innovators within: Within every company there are people already with answers to tomorrow’s problems. These ‘intrapreneurs’ are motivated to align social purpose and organisational goals. By identifying, mobilising and connecting these individuals,  pockets of possibility are created that ultimately shift corporate culture towards the new.
  1. Change the game: In a world of boring, ‘me too’ %-based reduction targets, Interfaces resolution to ‘Reverse Climate Change’ is exactly the bold move required to reframe the game and demonstrate leadership. It ignites employees and customers and sets out new ways of innovating, competing and doing business.

If we started with Einstein – let’s end with Goethe… “Whatever you can do, or dream you can do, begin it. Boldness has genius, power, and magic in it. Begin it now”.


Nicola’s first role working against climate change required her to come up with ideas for new businesses across all sectors in the Uk that could demonstrate the commercial case for a shift to low-carbon. She is still using commercial innovation to  change the world.