By Eduardo Alfonso Atehortua Barrero - December 17, 2015
I am a Deloitte Sustainability Services professional based in Medellin, Colombia. Last year, I was selected to represent Deloitte globally to participate in the Future Leaders Program of the World Business Council for Sustainable Development (WBCSD). Through this program, I have been able to attend the WBCSD Annual Council Meeting being held in Paris for a commencement ceremony. This meeting coincides with COP 21 and has also given me the opportunity to attend and participate in several events within the official ‘Blue Zone’. I would like to take this opportunity to share my perspectives on a number of my activities in Paris.
Perspectives on WBCSD Future Leaders Program
The Future Leaders Program (FLP) challenges participants to think about ideas of how to scale up business actions on climate change and improve the business case. Participants are business professionals coming from companies that are members of the WBCSD, a members-based network of around 200 global businesses. In the future, this program will be rebranded as the WBCSD Leadership Program.
The program focuses on the complexity of the climate change debate as well as the each participant’s leadership potential. Educational content is enriched through access to a network of climate experts including academics, government officials, business leaders and NGOs. This allows us to go beyond traditional approaches to business to understand the socio-economic barriers and drivers that lead to poverty, conflict and human rights abuses, and learn what progressive leaders are doing to address such issues through case studies.
FLP participants were asked to form multidisciplinary groups and develop proposals for approaches to achieve an emission reduction pathway consistent with the 2º Celsius objective that can be scaled up. This led myself and a group of my colleagues to a question: How will we be able to finance a scaled up version of the reduction pathway consistent with the 2ºC objective? Because of this lingering question, we decided to develop a project that not only increases awareness of this point but also provides recommendations for scaling up climate finance through the use of the green bond market.
Our first finding during the research page for our publication was the Green Investment Report developed by the World Economic Forum (WEF) that estimates that at least US$ 700 billion has to be invested every year to ensure that the global average temperature rise remains within the 2˚C limit.
Although both private and public sector organizations are expected to contribute to this large capital deployment in climate adaptation and mitigation projects, the private sector is expected to contribute the majority of this. Raising such large funds presents a set of challenges and opportunities in the development of innovative climate finance solutions. One such climate finance product, the green bond, intends to raise capital for projects or activities with high environmental benefits. It helps organizations raise money from more progressive investors and at the same time strengthen their credentials as a sustainable and responsible organization.
The green bond category is one of the fastest growing bond categories. Since its inception in 2007, the green bond market has grown to be worth over US$ 66 billion (June 2015). The past few years have seen particularly rapid growth, tripling each year between 2011 and 2014.
Deloitte is active in this market. We have been observers of the Green Bond Principles since August 2015. This initiative is intended for broad use by the market. It recommends transparency and disclosure as well as promoting integrity in the development of the green bond market. Deloitte also performs assurance services for the use of proceeds of green bonds in numerous organizations like Vornado Realty and the Agricultural Bank of China.
As a conclusion of our project, my working group found that by creating a powerful positive narrative around investing in profitable, environmentally friendly solutions, the green bond market can help develop broad momentum for environmental action among companies, investors, and the public sector.
IUCN: Investing in Nature: a smart choice to tackle climate change
I had the opportunity to participate in a roundtable hosted by the International Union for Conservation of Nature – IUCN. The objective of this roundtable was to examine the implications of COP 21 as well as the actions that policy makers and the private sector are taking, and need to take, to facilitate and support investments in nature. The event was an opportunity to interact with leading practitioners in the field and to highlight the importance of this topic to help mobilize the capital markets to finance solutions to address climate change.