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During the discussion, five key points emerged about the transition to an inclusive, green economy.

1. Is it reasonable to expect companies operating across vastly different regions to follow the same decarbonisation pathway

For emerging market companies, deploying and scaling available technologies to curb emissions is typically more difficult, expensive, and often more urgent than for companies in more mature markets. Each country has its own national emissions reduction targets, energy mix, capitalisation costs, and different capital inflows for financing projects. This reality places a heightened responsibility on investors and companies with a global footprint to adopt a differentiated response in driving emissions reductions across their portfolios.

‘For each operation, we must carefully consider the market and policy context for setting targets, and we need to think very innovatively in identifying appropriate climate mitigation solutions.’

Jeff Oatham — Global Senior Director Sustainability, CSR and Safety, Delivery Hero

2. Successfully driving a just transition in the Global South requires a significant increase in financing and more active engagement from financial institutions

The IFC has estimated that the climate-change commitments made by 21 emerging market countries will require as much as US$23 trillion in investment by 2030, highlighting the urgent need for increased private capital to supplement already stretched public financing. Enormous quantities of finance continue to fund unsustainable activities with an inadequate pool of funding left for decarbonisation initiatives. Despite growing engagement among financial institutions, there is a need for a fundamental culture change across the sector.

3. Delivering the pace and scale of change needed for a just transition requires more public and private collaboration  

The significant benefit of partnerships and collaboration between companies, business sectors, policy-makers and regulators cannot be overstated. At a sector level, GABV argued that ongoing dialogue and engagement across the financial industry is needed - accompanied by further collaboration with clients, regulators, policy-makers and the public - to ensure that more investors and financial institutions respond with the required urgency, pace and scale of change. At a government level, SBTi suggested that the uptake of decarbonisation pathways by companies in the Global South would be greatly facilitated by governments adopting policies and initiatives that incentivise climate innovation in the private sector.

‘To fully harness the enabling power of technology to transform economies, create jobs and boost economic activity will require business leaders and policy-makers to work together with other stakeholders in defining and shaping the economy for the benefit of us all.’

Phuthi Mahanyele-Dabengwa — CEO, Naspers South Africa]

4. Despite the challenges faced by companies in the Global South, there is a growing commitment to science-based targets (SBTs) among emerging market businesses

There has been a significant increase in demand for climate solutions from companies in the South and a growing number of companies setting SBTs, in some instances ‘leapfrogging their counterparts in the North’. However, despite progress, the biggest gaps are still in Africa and Latin America, which include economies with some of the highest potential emission growth rates. Driving greater uptakes of SBTs will require improved access to financing and a significant increase in building companies’ capacity to set and meet climate change targets and become more resilient to climate-related impacts.

5. Sustaining the required shift in approach in organisations ultimately requires a change in culture

For any company’s just and fair decarbonisation commitment to succeed - or its SBT to be delivered - the commitment must be deeply internalised across the organisation. While there is often genuine and well-informed buy-in from senior leadership, in most instances, there remains a need to make climate change more ‘real’ across the rest of the business.

‘If we wish to make climate change ‘real’ across an organisation, then it needs to be supported by a strong culture change drive. It is evident that with many organisations, it is not easy to embed this change.’ 

Lullu Krugel — Partner, Strategy and Chief Economist (PwC South Africa)”]

A video recording of the roundtable is available here. The short-form white paper is available here, and a report providing a more detailed account of the discussion is available here.

ENDS