Bringing Climate Innovations in Finance and Trade to Life
COP28 Session Recap
Decarbonisation requires new alliances and networks to unlock financing and reinvent trade.
To deploy climate solutions at scale, we need integrated innovation across areas including policymaking, business models, financial instruments, products, and culture. This requires us to be caring, sharing, and daring, says Massamba Thioye, Project Executive, UN Climate Change Global Innovation Hub. Caring enough to make a difference; sharing enough to drive “radical collaboration”; and daring enough to rethink what is possible.
Thioye introduced a session titled "Financing Transformative Climate and Sustainability Solutions Aligned with the 1.5 Degree Goals and SDGs” as part of COP28 on 4 December.
The panellists discussed how a ‘whole economy' approach was needed to reach net zero, with the right policy, regulatory and political environment crucial to support innovation and offset risk.
Policy frameworks at national and global levels would help to provide more shape and certainty for financial institutions to support climate innovation. Frameworks would also serve as an important foundation as ESG issues more broadly continue to be swayed by consumer behaviour and the political backdrop.
Working together to de-risk green projects will help incentivise long-term investment and improve opportunities for private sector philanthropy.
A global carbon pricing structure is also a crucial missing part of the puzzle – it is not just about incentivising green, but also disincentivising brown.
The future of sustainable trade
In a separate session on 4 December, speakers gathered at the Sustainable Trade Forum to discuss the crucial role that businesses and trade play in addressing climate change and transforming innovations into scalable solutions.
Global trade is an essential driver of growth, productivity, and opportunity – but it needs to modernise to meet our climate commitments. Our global trading system needs to become cleaner, smarter and more inclusive, says UAE Minister of State for Foreign Trade, Dr Thani bin Ahmed Al Zeyoudi.
The long-term viability of trade is built around firstly transitioning to green energy throughout the supply chain and including end users, he says. Secondly, it must focus on improving operational efficiency, including reducing waste and conserving resources.
COVID-19 taught businesses a lot about supply chain diversification and resilience and some of those lessons can be applied to building more sustainable trade systems. New alliances will need to be forged and sectors and companies can learn from one another.
For example, DP World launched the Digital Freight Alliance, a freight collaboration platform. Our mission is to help forwarders and NVOCCs improve and streamline their operations by equipping them with tools, routes, and services that will help optimise and streamline their operations, thereby improving their resilience.
When looking at the future of trade, climate justice is part of the equation. For years the global North has benefitted from trade, but countries in the global south are paying the price. There needs to be a focus on a just transition that doesn’t leave nations behind.