Shaken Not Burned

Highlighting changemakers and solutions

What we’ve been reading this week

•  Could debt for nature address climate and economic vulnerability?

  Colombia is reported to be negotiating a debt-for-nature swap with Germany to finance its $40 billion climate transition plan. The potential in debt-for-nature swaps is exciting given the complexities in climate finance. Many countries facing huge transition costs are already in debt and significant proportions of their income is spent on servicing that debt – at interest rates that are significantly higher than those for the providers of that debt. When the debt is forgiven, or restructured, the country can use those freed-up debt repayments to invest in the protection of nature. For many climate-vulnerable countries, many of which are also at risk of defaulting on debt payments, this can address two significant challenges at once.

• Climate funds are taking action on industrial decarbonisation

  The multilateral Climate Investment Funds (CIF) has announced a $1 billion initiative for industrial decarbonisation, to be deployed through its $8.6 billion Clean Technology Fund. The CIF was established to run pilot projects in developing countries so the potential to support heavy industry transition in economies that have the highest burden could be pivotal. Tariye Gbadegesin, chief executive of Climate Investment Funds said: “To meet our climate goals, we need industry’s emissions to decline by 20% by 2030 and 93% by 2050.” That’s a hugely ambitious target when so many in the private sector are struggling with how to move forward. For the first time, the fund is going to accept proposals from the public and private sector and countries have until January 17 to express interest.

• CEOs stick with climate action but change comms

  There’s increasing confusion in the private sector about what to say about climate change. Many early adopters set targets for 2030 before doing the work to understand how complex this would be, and increasing politicisation around ESG reporting hasn’t helped. Despite the challenges, a survey from KPMG reported that over two-thirds of CEOs said that they intended to stick by their climate commitments, even if they planned to change the way they talk about it. 2030 goals remain a challenge, with key barriers remaining the complexity of decarbonising supply chains, and a lack of skills and expertise to successfully implement solutions, each cited by a quarter of the surveyed CEOs.

• UK supports continued fossil fuel use

  On a sourer note, there have been announcements this week that provide cause for concern. The UK has announced nearly £22 billion in funding for CCS industrial clusters, which locks in the use of fossil fuels for years with a technology that has failed to reach commercialisation despite decades of investment. Concern about oil and gas industry jobs is one driver for the funding, but the potential consequences are worrying. On top of that, BP announced its new strategy – instead of cutting production by 2030, it plans to focus on oil and gas. It looks as if politics, lobbying and a focus in short-term financial payback are trumping any concern about the future or how to adapt to the changing climate. BP claims that it is still holding to its 2050 net zero target, but we need action now. Companies are recognising how hard achieving net zero is going to be – and, instead of taking responsibility and knuckling down to action, they’re passing the buck to those who will face increased physical risk, resource challenges and political pressure at a later date.

• EU proposes delay deforestation products ban

  The EU had proposed a delay in implementing legislation to tackle commodity-related forest loss (the EU Deforestation Regulation or EUDR), raising concern that there signs of increasing backpedalling on climate commitments. As Reuters points out, the delay means that those who implemented plans to comply with the regulations and avoid links to deforestation will effectively be punished, as those who would have been caught by the regulations will face no consequences. Some argue, despite the urgent need to address biodiversity risks, that the delay is much needed as companies haven’t had time to prepare effectively. It is very clear that there are significant problems with data availability, but also many food and drink companies haven’t yet even started to talk to their supply chain about mapping commodities. If rules about due diligence get pushed back – doesn’t that simply tell companies that if a problem is too difficult, they don’t need to worry? While trade-offs are a part of making policy and doing business, it’s hard to see how nature and the climate benefit here. Another signal of the focus on short-term benefits while ignoring long-term needs.