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Introduction and Background

The annual U.N. Climate Change Conference, or COP26, serving as the meeting of the Parties to the Paris Agreement,[1] was held in Glasgow, Scotland from 31st October to 12th November 2021. This 26th edition culminated with The Decision entitled “Glasgow Climate Pact” which has put science, nature and urgency front and centre, and galvanized global efforts behind 1.5°C,[2] namely a 45% reduction in global greenhouse gas (GHG) emissions by 2030, as a response to the existential threat of climate change. Or as one of the many critics of the deal put it “a small step in a race against time.” Notwithstanding, the severe criticism from climate advocates on the Glasgow deal ability to keep the 1.5°C temperature goal of the Paris Agreement within reach,[3] at least it has kept the prospect of achieving it alive.[4]

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It wasn’t all gloom, because outside the negotiation halls, leaders agreed on a broader package[5] signalling change. In fact governments and non-state actors stepped up on key challenges together, including a breakthrough commitment to end deforestation, with 133 world leaders responsible for around 90% of the world’s forests promising to end and reverse deforestation by 2030, plus 33 financial institutions with $8.7 trillion in assets under management, committed to tackle deforestation in the 2020s.[6]

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While all natural, terrestrial carbon sinks on the planet, i.e. forests, wetlands etc. currently absorb less than estimated 30% of human carbon emissions, it is important to remind ourselves that The 2030 Agenda for Sustainable Development and the Paris Agreement are intrinsically linked. Sustainable development and climate action must be pursued in a coherent way to ensure that progress towards these objectives is effective, equitable and supports the best outcomes for all, including developing countries.[7]

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Where the SDGs & COP26 can create value for business

The SDGs describe the greatest challenges and needs of our time and the goals for addressing these. The SDGs also represent a major opportunity for businesses to shape, steer, communicate and report their strategies, goals and activities, allowing them to capitalize on a range of benefits. There are a number of compelling reasons for businesses to pursue social impact and engage with the SDGs. According to the Business and Sustainable Development Commission, achieving the SDGs opens up some USD 12 trillion of market opportunities in the four economic systems examined by the Commission, which are critical to delivering the SDGs.[8] Thus, there is a clear business case for the private sector to invest in SDG implementation. In fact, Glasgow has created unprecedented convergence between investors, businesses, cities and subnational regions that can drive real economy transformation. And now all these actors must deliver.

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According to The Founder of the Solar Impulse Foundation, explorer and clean technology pioneer Bertrand Piccard “the first good news is that the COP26 roadmap goal remains achievable. The second is that the measures will not only be good for the environment and the quality of life of citizens, but also for the economy. They offer tremendous opportunities for the development of new revenue streams and in building profitable infrastructure to decarbonise the world.”

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Market mechanisms for carbon

The second challenge is to establish market mechanisms for carbon whose objective it is to achieve carbon neutrality as quickly as possible at the global level, because it is often more efficient and less expensive to invest in a developing country where emissions can be greatly reduced, with low investment.

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For example, Gabon has become the first country in Africa to receive results-based payments for curbing deforestation under the Central African Forest Initiative (Cafi). Based on expert assessments, the country was awarded $17 million from Norway through Cafi because of lower emissions from forest loss in 2016 and 2017 than the 2006-2015 baseline.

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However, this system has several detrimental effects: One problem comes from its accounting: normally, the investing country registers the action for its own benefit. But some states want to keep the credit for any foreign investment made on their soil ... Thus, to avoid double counting, it is necessary to establish strict rules in the traceability of projects.[9]

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A new age of climate finance: Following the Money?

Climate finance is all over the Glasgow Climate Pact. Rich nations recognized they haven’t met the objective of raising $100 billion of investment per year for developing countries through the Green Climate Fund until 2025. Members of the OECD Development Assistance Committee (DAC) issued a joint Declaration ahead of COP26 committing to align official development assistance (ODA), which totalled USD 161 billion in 2020, with the goals of the Paris Agreement on Climate Change.[10] On the other hand, Developing countries pushed hard for this issue during COP, even proposing a new target of $1.3 trillion per year by 2025. This proposal was not adopted.[11]

Dispute aside, ODA in any case only represents a small share of total resources needed for sustainable development. Developing countries’ domestic resources and private sector finance are already, or have the potential to be, far more substantial. In support, ODA can be transformative, enabling access to the best technology and equipment on voluntary and mutually-agreed terms, to take risks, to finance innovation and to leverage additional public, private and blended finance.[12]

Private climate finance announcements included:

??A new climate-focused exchange-traded fund,

??A new coral reef fund,

??A new green energy alliance, and

??Nearly 500 global financial service providers “committing to align their $130 trillion in private capital with the Paris Agreement transforming the economy for net-zero.” A flurry of hot takes and deeply considered critiques have interrogated this statement by U.N. climate envoy Mark Carney as part of his Glasgow Financial Alliance for Net Zero, or GFANZ.

Or as Adva Saldinger writes in Devex Invested, there are questions over whether some of the new vehicles will scale and how financial companies will act on their commitments.[13]

What we can all agree on that these “Net zero financing pledges must be brought forward in time for them to matter, through real near-term investments that accelerate the decarbonization of energy infrastructure in the real economy within the next five years,” Encourage Capital’s Adam Wolfensohn and Daniel Firger write in a guest post on ImpactAlpha. “This investment capital must be targeted not only in time but also in space, focusing on the precise geographies and markets that matter most to shifting the future trajectory of global emissions.”[14]

Solar Impulse Foundation’s Solutions Explorer

As a complement to the other ambitious Global Energy Alliance for People and Planet launched by IKEA Foundation, the Bezos Earth Fund, the government of Italy, and dozens of nations, multilateral institutions, and international organizations,[15] just hours ahead of the start of negotiations at the UN Climate Change Conference in Glasgow, Bertrand Piccard offered political and economic decision-makers 1300+ Solar Impulse Labelled Efficient Solutions that help them meet more ambitious climate targets without compromising economic growth.[16] The Solar Impulse Foundation presented new tools are the result of five years of searching, analysing and promoting more than 1300 products, processes, and services that protect the environment in a profitable way. To search through all these solutions, the Foundation launches the Solutions Explorer. It offers a one-of-a-kind search engine that showcases climate solutions from all over the world.

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Bertrand Piccard, Chairman and Founder of the Solar Impulse Foundation, says:

“[…] raising ambitions does not represent an unmanageable risk but rather an economic opportunity to be taken with audacity. The good news is that the technologies exist and they are just waiting to be implemented.”[17]

Looking for some impactful solutions to feature? Here are two SIF examples:

The first solution is OX?-ZEN

Founded in 2019 by Christopher MBANEFO. It is a scientific and economic platform that brings together CO2 Emitters and Convertors. OX?-ZEN is a scientific and economic platform, which brings together CO2 Emitters and Convertors. A blockchain solution to make sure the transactions are secure, transparent and direct. A simple way to offset GHG emissions through scientifically verified sequestration. OX?-ZEN provides clear economic incentives to promote, enhance and develop increase carbon sequestration, as an added value in order to achieve a planetary balance between emission and sequestration. By enabling the monetization of carbon sequestration capacity, remote and rural communities can generate income, which enables the realization of SDGs, while incentivizing them to protect and enhance their carbon sinks, resulting in increased bio-diversity and their quest for sustainable solutions.[18]

The second solution by AxessImpact, or Sustainable Capital Allocation

Co-founded by Yves Carnazzola, this solution is still in the process of obtaining the Solar Impulse Efficiency Label, after having been presented at the United Nations[19] and the Building Bridges event in Geneva.[20] It’s a FinTech company whose mission is to offer an end-to-end process bringing Nature-based Solutions (NbS) – A Virtuous Certification Cycle - to Corporates and Investors through the path to Trust, Traceability and Transparency. AxessImpact’s mission is to bring together domain experts and cutting-edge technology to guarantee projects have with highest levels of trust and transparency, thereby addressing the growing risk of resource misallocation and green washing. The founders have recognized the need to reduce the role of the intermediary in order to obtain better trust especially from the local communities. It also uses an Eco- (public services) blockchain, that is a permission blockchain which is validated amongst the stakeholders, and it is multiprotocol and multi-stakeholder. The solution is working on three dimensions: Measurement, Monitoring and Monetization. infrastructure projects.[21]

The new collaboration with the Geneva-based NGO ADAP is a milestone on this journey. ADAP has accumulated curated data and performance metrics in the management of the protected area and its forest and wildlife resource in Western Tanzania. In addition, ADAP has established partnerships with local stakeholders engaged in the management.[22]

These two solutions selected in the Solutions Guides are part of a much broader portfolio of 1000+ solutions that the Solar Impulse Foundation has labelled for being climate-friendly and profitable. Everyone can discover them in the Foundation’s Solutions Explorer.

Conclusion

Glasgow has helped to bring the non-state actor and government agendas closer together. At COP26, we have seen positively reinforcing actions by sub-national governments, industry, and finance, in the global south as well as the global north — signals of the breakthroughs and economy-wide transformation we need.

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To achieve the SDGs and COP26 objectives its is important to prioritise support to technologies focused on accelerating progress towards net zero systems, in particular renewable energy; energy efficiency; carbon capture, utilisation and storage.[23]

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It is likewise necessary to recognise the urgent need to support investments in adaptation and resilience that are nature positive, locally-led, inclusive, transparent and gender-responsive, including through nature-based solutions.

Furthermore, nature-based solutions, such as Ox?-Zen and AxessImpact, play an essential role to enhance climate mitigation and adaptation, while tackling deforestation and restoring biodiversity, building resilience and mitigating GHG emissions. They also provide a range of economic and social benefits, including for indigenous peoples and local communities.[24]

In conclusion it is evident that the corporate world, especially the private sector, has a pivotal role to play in combating climate change but that is not all. There are numerous opportunities, as shown in the SIF Solutions Explorer, to tap into as the corporate world gears towards metamorphosing into the sustainability direction. Firms that rush to adopt the deliberations of the COP26 will have an upper hand in doing good while doing well. Climate action is the new business frontier.[25]