Event recap: Global Sustainability Initiative

By Andrijana Cvetkovikj, North Asia Director

We recently kicked off the Global Sustainability Initiative, our new annual event exploring how sustainability issues are shaping global business and geopolitics. We started with a virtual event on January 12th, The Role of Business in Addressing the Climate Crisis, which involved all EICN networks. This year, the Global Sustainability Initiative events will focus on the opportunities and challenges firms will face in grappling with climate change. At COP26, there was more corporate engagement than ever and increasingly businesses are active partners in the urgent effort of stabilising our climate. Through these programmes, EICN aims to go beyond greenwashing and equip members with real insights and foster practical dialogues.

We were joined by Henk Ovink, Special Envoy on International Water Affairs for the Kingdom of the Netherlands, Vivek Pathak, the International Finance Corporation’s Global Head and Director of Climate Business, and Shally Shanker, Founder and Managing Partner of climate impact fund AiiM Partners, to explore the opportunities and challenges for business related to climate change.

Climate risk and risk management

A net-zero approach could potentially be a climate risk and organisations have to think about ways to be climate positive. The world stands to lose 10% of its economic output to climate change and for the first time, climate risk is affecting the global economic north and investors are losing money from physical risk. Thinking about climate change as a risk will get investors interested and where there is risk, there is also opportunity, the other side of the same coin. Business gains beyond silos will create value across supply chains and investment lines.

We also discussed how to get scale in the private sector and it will come through private-led solutions and the developing and greening of domestic capital markets. There was also a focus on adopting a more medium- to long-term approach rather than treating it from a short-term perspective. Corporate involvement in COP26 was like a breath of fresh air and many private companies have already stepped up and bought technology and made it available globally in a way non-private actors could not have done so.

States’ rights and national boundaries: viruses don’t see that

The interdependency of risks is a global problem. An example would be the ship stuck in the Suez canal (Evergiven), which led to supply chain problems on a global scale. The same thing happened during the Bangkok floods a decade ago: supply chains across Asia were affected. However, COP26 gives us cause for hope in the form of the amazing number of coalitions created to tackle climate mitigation and adaptation in the here and now. Half of the world’s population will be in east Asia and southeast Asia in the future and 60% of city infrastructure there is yet to be built. Economic growth is in urban areas because manufacturing growth takes place there. The IFC, for example, is piloting public-private-partnership (PPP) models in Fiji where the government provides the land and the project has to be climate resilient and green.

Potential for the circular economy and hope for the future

The three Rs: reduce, reuse, recycle are a critical part of Dutch policy and integral in the use of water. Climate change will affect people at the bottom of the pyramid. Bangladesh will have 40m climate refugees in the future. We must ask the hard questions. Who is benefitting? Who is losing? Investors or local communities? On that cautionary note, we ended our first discussion of the Global Sustainability Initiative.