Issue #3: Life Beyond the Climate Change Benchmarks
FII Institute
FII Institute is a global nonprofit foundation with an investment arm and one agenda: #ImpactOnHumanity
The Guardian recently surveyed hundreds of the world’s top scientists from the Intergovernmental Panel on Climate Change and found that nearly 80% expect at least 2.5C of global warming – a full degree above the internationally agreed upon target.?
The likely results of this include food shortages, violence, and unprecedented climate migration.?
We’ve moved from an era of prevention to an era of adaptation. Resilience is critical. Rethinking climate finance can help.
October 29-31 2024 | Riyadh
By better identifying resilient locations, sectors, technologies, and businesses, we can increase capital flows in their direction, leading to a higher likelihood of effective solutions.
However, capital must flow not only to the Global North but also to emerging markets. The United Nations Environment Programme has estimated that up to $387 billion will be required per year in developing countries by 2030 to support adaptation to climate change.?
Several trends suggest strong investment opportunities in these regions.
Samples uses for AI in adapting to climate change
A Modern Approach to ESG Is Needed
FII Institute has argued since 2019 that ESG, as most commonly interpreted, does not efficiently target investment in emerging economies. Emerging markets currently receive less than 10 percent of ESG capital flows, despite accounting for 58 percent of global GDP.
So, we offered a pathway forward. Our Inclusive ESG Framework and Scoring Methodology is built specifically for emerging markets, delivering standard KPIs and unbiased analysis without greenwashing.?
The Inclusive ESG Score looks at:?
By bringing emerging markets to the attention of investors, we can unlock some of the vast resources that will be needed to transition humanity to a just and low-carbon world.
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FII Institute Perspectives
Global temperatures rose 1.5 degrees in the past year, with July 22, 2024, the hottest day ever recorded globally according to a NASA analysis. Climate change was especially noticeable during the Paris Olympics, when temperatures hit 36 degrees Celsius. Compared to 1924, when Paris last hosted the Olympics, the city was 14.7 degrees warmer, according to Climate Central, an independent group of scientists and communicators who research and report about how climate change affects people’s lives. ?
Mapping the Future: Where to Invest for True Resilience (2024) – Geopolitics, demographics, technology, and climate change are reshaping the world. While it’s difficult to predict the future, data science can help investors understand how these trends are interacting to create new investment opportunities amid perpetual volatility.?
Climate Resilience in Emerging Markets: The Unavoidable Opportunity for Growth Investment (2024) – Climate change is a clear and present danger to humanity. Its impact must be addressed urgently and at scale. This makes climate resilience and adaptation a uniquely important growth investment opportunity, with demand likely to increase as climate change unfolds through 2040 and beyond.??
AI for ESG Impact (2024) – AI is transforming sustainable finance. The technology can help investors better understand the market, develop new “green” financial products, and filter the wheat from the chaff. At the same time, it can help organizations unlock environmental benefits through better use of energy, more intelligent forecasting, and more human staffing. But alongside AI’s incredible promise come crucial questions about who stands to gain, who might be left behind, and how we can ensure tech innovations promote equality.?
FII Institute Recommended Reading
Investment in climate technology is critical for the Middle East, one of the world’s most vulnerable regions to the impacts of climate change. Yet funding for climate-tech startups lags in the region. Fast Company explored solutions that are helping to bridge the funding gap.
Funding for climate tech startups continues to be a key growth driver for Africa’s private sector. To build on this momentum, African leaders and investors must work together to address risks and leverage diverse funding methods. Read more in the Associated Press.
The Financial Times analyzed the challenges of investing in startups focused on the energy transition, highlighting ways investors and government institutions are overcoming these obstacles through partnerships and creative deal structures.?
Deloitte explored ways financial services institutions can help bridge the US$2 trillion funding gap needed to effectively slow global warming. Solutions include creating innovative financing instruments, helping climate startups build their creditworthiness, and facilitating market development through information sharing.
Analysis highlighted in The New York Times covering two decades of peer-reviewed research showed that the average social cost of carbon is significantly higher than the U.S. government’s current estimate. With climate change damage projections continuing to rise, the financial industry is grappling with managing long-term risk while delivering short-term returns amid conflicting incentives.?
October 29-31 2024 | Riyadh
Under the Royal Patronage of the Custodian of the Two Holy Mosques, King Salman Bin Abdulaziz Al-Saud, FII 8th Edition conference will be held on October 29-31, under the captivating theme ‘Infinite Horizons: Investing Today, Shaping Tomorrow,’ FII8 will ignite discussions on how investment can serve as a catalyst for a prosperous and sustainable future, pushing the boundaries of what is possible for humanity.
FII8 promises to be a melting pot of innovative ideas, bringing together global leaders, entrepreneurs, political leaders, media and decision-makers in finance, AI, sustainability, energy, geoeconomics, space and beyond. By focusing on the theme of ‘Infinite Horizons,’ this year’s conference will challenge attendees to think beyond conventional limits and explore investment opportunities that can bridge current challenges with future possibilities.