Leveraging Innovative Finance for the SDGs 5 MARCH 2019 SESSION IX FINANCING THE SDGs FRAMEWORK Working With The Private Sector on Climate Change Presented by Erik Davies March 2019 We have come a long way ID: 794562
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Slide1
Incentives, models and tools
Leveraging Innovative Finance for the SDGs
5 MARCH 2019
SESSION IX
Slide2FINANCING THE SDGs
FRAMEWORK
Slide3Working With The Private Sector on Climate ChangePresented by Erik Davies
March 2019
Slide4We have come a long way…
Pre 2002
Lack of trust internationally
Yet many partnerships with business at local level achieved development goals
The World Summit on Sustainable Development (2002)
Business officially recognized as development actors
Today 2019
Mobilizing significant private investment to address climate change
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Slide55
Projects
Traditionally governments and donors have tapped into big business through their CSR programs for project financing. CSR programs represent a tiny part of what business can contribute
Enabling sustainable business models will mobilize significant investment from business – since this talks to their bottom line.. Moving from CSR To Sustainable Markets
Sustainable Markets
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Risk
Markets
OpportunitiesHow Does Business View Climate Change
New markets with new players:Wind, solar, battery storage
Zero emission vehiclesAutonomous aquatic robots for collecting ocean plasticsProduct differentiation:Blockchain & Supply chain finance (Traceability & Transparency)
Consumers are demanding sustainable products
Driven by improved: access to information on how products are made (internet)Education regarding impacts of productionGlobal Brands are starting to drive GHG reductions across their supply chainsExtreme weather and associated disease outbreaks disrupt business and destroys capital investments (Thailand’s floods 2011)Stranded assets in oil, coal and natural gas (Investor Risk, lost jobs, lost business)GHG emissions and air pollution can result in regulatory fines, and bad press
Slide77
Business can respond to climate change at 3 levels:
Corporate: focuses on all aspects of operationsSupply Chain: working with suppliers to manage their impactsSectoral: working with broad set of stakeholders to drive change
Business Response
Corporate
Supply Chain
Sectoral
Slide88
The Business Response (cont)
Many businesses are changing in their operations and driving reform in their supply chains. The degree to which this is happening depends upon:
Business incentive: - how climate impacts profitsCapacity, resources and skills available to respondExternal Support to navigate change
In this respect there have been some interesting innovations to how businesses are response to the climate challenge.
Slide99
Green Freight Asia
Clean Cargo Working GroupRenewable Energy Buyers Alliance
BSR develops collaborative initiatives among multinationals trying to address climate change. A few examples include:
Collaborative InitiativesShippers and carriers in Asia committed to reducing GHG emissions (IKEA, DHL, Heineken, etc.)
Creating markets for renewable energy (63% of Fortune 100 companies have targets to reduce GHG emission or buy renewables)
Represents 85% of global freight carrying capacity. Its members are committed to reducing environmental impacts and GHG
Slide10Collaborative Initiatives & Government
While the resources of large companies are considerable, collaborative initiatives have also taught us that government support is crucial.Many have benefited from donor support at start-up
Collaborations have helped identify opportunities where government interventions are required to create more sustainable markets.REBA identifies regulatory barriers and other challenges to procure renewable energy. GFA needs help reaching SMEs and creating financial incentives for fleet upgrades
Once these “barriers” are removed, the benefit of government support is the creation of a sustainable market driven by long term private sector investment
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Slide11How Governments Can Support Sustainable Business
Governments successful in creating vibrant business environments do so by providing:Clear streamlined policies and regulatory frameworks that align the work of ministries and send a clear, consistent signals to business.Tax incentives and disincentives on products etc.
Subsidies for green businesses and removing perverse subsidies Educate and raise awareness SMEs on climate change issuesDevelop enabling infrastructure (smart grids, charge stations,
etc) for new businessWork with banks to provide accessible financing that reduces riskEliminate corruption and increasing transparencyThese measures have consistently been shown to encourage business investment by creating safe, sustainable markets
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Slide12Create start-ups that contribute to climate resilience in your country
Support collaborative initiatives by addressing barriers identified that free up market investmentsChallenging times require innovation. Don’t be afraid to try something new!
12Public Private Partnerships
Cross Hiring From Business
Consultative Groups
Developing Incubators For New BusinessInvent something new!
Collaborative InitiativesHow Governments Can Partner With Business Design, Build, Operate, DecommissionTraditionally for infrastructure projects but are being adoptedInvestigate challenges facing businesses by forming working groups with industryHire people from the private sector to increase your capacity and understanding of business issues
Slide13The Bottom Line
Successfully engaging business requires:
Speak their bottom line
Developing clear policies, regulations and incentives to support the development of sustainable markets
Proactively engaging business in multiple ways to develop trust, understanding, and drive innovation.
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Slide14Parallel Sessions
Climate Smart Investments – Alpha Room – GREENThe Business of Climate Change –
Beta 1 Room – PINKScaling-Up Climate Finance Readiness through Public-Private Partnerships – Beta 2 room- BLUE
Social Impact Investing – Delta Room – MINTGreen Finance – Epsilon Room – ORANGE
Risk Financing – Gamma Room - YELLOW