Funding + reskilling + data + consumer engagement = energy transition success?

Pledges. We’re hearing a lot about pledges at COP28. But is that enough? Participants at the Energy Leaders’ Roundtable Dinner, facilitated by CMS for the Global Success Partnership, don’t think so. Consensus was that pledges are a good start but despite the number that have been made over recent years, emissions keep growing. Pledges must evolve into targets and then most importantly into action and demonstratable impacts on reducing emissions. 

How is this action being driven? Views were that leadership is evident at all levels - from the highest levels of government, in the largest multinationals, to the SMEs and the small farmsteads of Kazakhstan. Leadership is about being a first mover and taking a calculated risk, and then your competitors or your neighbours will follow. With so many businesses being represented at COP28, there is no doubt that the international business community sees real commercial opportunity in shifting or expanding their businesses to deliver a more sustainable future. The private sector will turn the commitments into reality.

But what will speed up the shifts within businesses? Consumer demand. Guests at the roundtable agreed that consumer power should never be underestimated and there is an urgent need to change demand patterns. However, even when consumers have the best intentions, a sustainable choice may be out of reach – too expensive, lack of infrastructure or perhaps lack of information. 

Another driver of change is accountability – accountability to shareholders, employees, customers, regulators and government. CDP has 22,000 companies disclosing information and this transparency has seen success stories including global banks coming together for the first time to create a global repository of information on activities of themselves and their investments. This data provides the ability to make informed investment decisions, filtering opportunities that match ESG requirements.

So how can we tackle the funding issue? It is an issue for the largest businesses to the individual home owners. Unlocking finance has been a key theme of COP28 and the carbon markets have received some positive press after a difficult year. The view at the roundtable was that the idea behind project based markets is the right one, especially in countries that are considered high risk for investment. Any project that produces carbon has the potential to use carbon streaming as a financial instrument but to qualify, it is important that they are measured and rated by trusted standards. It was commented that carbon credits must not be used to avoid reducing emissions; they do not give permission to continue to pollute. Instead, they can be highly successful in enable financing of projects that may not otherwise be afforded by local government budgets.

As new technologies are developed and infrastructure starts to shift towards more sustainable formats, we need people to model, forecast, design, build, operate and maintain these new ways of working. The sense was that this is both a huge challenge and a huge opportunity. It requires a cultural shift – it is no longer the job of the Environmental team but it is the job of every single individual – it is everyone’s game. Regulation may persuade people to make this transition, but the regulators must take a global and holistic view of the challenge and structure ESG obligations in a way that enables change.

Thank you to all the guests at the Energy Leaders’ Roundtable Dinner – EBRD, CDP, South Pole, Bankers for Net Zero, Environmental Defense Fund, Great River City Light Rail and Blue Green Water Technologies.