My Sixth COP

I'm heading to my sixth COP, the annual United Nations conference on climate change. To say that I'm going to Dubai with enthusiasm would be a lie, but I would also be dishonest if I told you that these meetings are useless. Even though progress is slow, we still manage to move things forward. Nonetheless, these small victories may seem insignificant in the face of urgency and the magnitude of the challenges we are facing. That is why it is essential that activists —?those who want and will provoke change — are there to be part of the conversation.?

We already know that with the current level of action, achieving the goal of the Paris Agreement from COP21 — the 1.5°C target— is unreachable. Even the less ambitious 2°C target seems out of reach. In fact, according to a recent report from the United Nations Environment Programme (UNEP), current policies will lead to a temperature increase of 2.5°C to 2.9°C by the end of the century.?

Around the world, we need to prepare for more frequent environmental disasters and their consequences at all levels, individual and organisational, but most importantly, at the societal level. Preparing our societies means developing societal resilience1. This societal resilience, increasingly imperiled by the intertwining crises we currently confront — ranging from environmental and economic to social and health-related — is of paramount importance for me as I head to Dubai.?

There, I will try to find answers to the following questions: how can we become more resilient as a society when environmental projections are so pessimistic? What roles will different stakeholders assume in strenghtening this resilience? How can we better value their respective contributions???

Allow me to share with you some pre-departure reflections, (and know that I will be carrying with me the hope of returning with actionable solutions to implement within our organizations).?

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1. State leadership is expected?

The latest COPs have shown us that two major challenges hinder negotiations and prevent governments from taking necessary actions in the face of the combined climate change and biodiversity loss crises:?

a) Climate-related issues are polarizing??

The clash between states inclined towards more ambitious actions and those more reluctant has led to the unsatisfactory decisions we've witnessed.???

Despite some governments showing modest ambition during negotiations, the consensus-driven nature of COPs means that dissenting states can easily block significant progress. This limitation also extends to the power and capabilities of the UN: namely,?the organizer of the COPs. The same obstacles are at play within states between political parties that have hijacked the climate crisis and transformed it into a polarized political wedge issue.??

However, this isn't a reason to shy away from the fight and to advocate for actions that match the urgency of the climate crisis. I remain convinced, and motivated by the idea that any progress in the right direction is essential.?

b) Public funds dedicated to climate change mitigation and adaptation are insufficient?

In low-income or middle-income countries alone, a UNEP report estimates that between US$ 215 and 387 billion per year are needed for climate change adaptation.??

Regarding the reduction of greenhouse gas emissions: just a few weeks ago, the COP28 presidency, the International Renewable Energy Agency (IRENA), and the Global Renewables Alliance urged governments to triple renewable energy capacity by 2030 to prevent global warming from exceeding 1.5°C.??

States will undoubtedly need to find ways to ramp up investments, public and private, dedicated to climate change mitigation and adaptation on all fronts. And this doesn't even touch on efforts related to protecting?and restoring biodiversity!?

In summary, states must lead by example in terms of climate ambition and action. They will need to overcome the challenges mentioned above, still relevant for COP28, or the environmental and socio-economic consequences of the climate crisis will only worsen.??

Governments, however, cannot face these challenges alone.?

1. Private finance must enable concrete solutions anchored in the real economy?

As a financial actor myself, I've observed a significant evolution of?the finance sector`s role in and around climate negotiations. In COPs, much unfolds outside the rooms where government negotiators deliberate for hours on a word or two,?each carrying immense significance — think of the famous semantic debate between “phasing down” and?“phasing out”, regarding the role of fossil fuels in the coming years, to name just one.?

The private finance sector, in particular, is gaining prominence in these discussions. Influential figures are advocating for us to be part of the solution rather than the problem and are shifting the needle in the right direction. As such, this has led to the launch of the Glasgow Financial Alliance for Net Zero (GFANZ) at COP26 in Glasgow. With trillions in?private capital available, we have access to substantial means to contribute to the achievement of our climate imperatives.?

Private finance also occupies an increasingly prominent role in COPs because, as previously stated, more resources need to be dedicated to the climate crisis, not to mention other crises. Especially considering that, according to the Convergence mixed financing network, one dollar of public investment can generate four dollars from the private sector.??

Still, financiers must make the right choices and steer away from activities harmful to our planet and communities. BloombergNEF estimates that to limit global warming to 1.5°C above pre-industrial levels, the ratio between green financing and fossil fuel-related financing should now be four to one. Currently, this ratio is closer to one to one…?

To make the right choices and be part of the solution rather than the problem, the financial sector must scrutinize its underlying motivations. This requires going beyond fiduciary duty to make finance a tool for constructing sustainability, rather than treating it as an end in itself (I invite you to read a recent article I published on this subject for a more in-depth exploration).?

However, it is evident that the finance sector, much like government institutions, operates in a constraining system that so far has failed to channel capital to the right places. Several systemic obstacles obstruct the path to transition, such as fiduciary responsibilities that urgently need updating considering current crises, resistance from anti-ESG movements, techno-solutionism, the omission of reference scenarios in many policies and financial decisions, etc.?

In other words, finance is not a miracle solution either. To make our society more resilient, an important stakeholder must be added to the equation here: civil society.?

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1. Civil society is key to our societal resilience?

Today, it is impossible to deny the extent of?climate crisis repercussions, that is,?beyond the environmental sphere and into social and economic dimensions. In Canada alone, not to mention human impacts, it is estimated that the economy could suffer a loss of 5.5 trillion dollars by the end of the century due to climate change, not to mention the profound human impact. Now more than ever, the most vulnerable populations are those who first bear the cost?of all crises. We have a compelling obligation to listen carefully to?their voices, not just during COPs but well beyond. This commitment demands our attention consistently, persistently, and, above all, sincerely.?

For finance to be in the right place, civil society must also be part of the conversation. As finance stakeholders, we bear the responsibility of consistently incorporating social and environmental considerations into our calculations. Without this systematic integration, our society won't achieve resilience, and, by extension, our business models won't either. Financiers alone, without civil society, cannot?define what is sustainable in sustainable finance.?

During my last COP, I witnessed the development of a new systemic approach, propelled by civil society. I participated in exciting discussions about solutions taking into account the various concurrent crises. I sincerely hope that these kinds of conversations will gain broader traction, encompassing all stakeholders of societal resilience:? governments, the UN, private capital, and civil society.?

So, as I head to COP28, a central question occupies my thoughts: what role will societal resilience — which is indispensable — play in the discourse and deliberations unfolding in Dubai??

The answer will be the subject of my next post.?