Financial institutions are banking on COP28

COP28 president Sultan Ahmed Al Jaber speaks during the opening ceremony of the COP28 United Nations climate summit in Dubai on November 30, 2023. Photo: AFP

COP28 president Sultan Ahmed Al Jaber speaks during the opening ceremony of the COP28 United Nations climate summit in Dubai on November 30, 2023. Photo: AFP

Published Dec 1, 2023


BUSINESS, especially the financial services sector, has a crucial role to play in funding and accelerating the transition to cleaner and more sustainable sources of energy, says Absa Group Chief Strategy and Sustainability Officer Punki Modise.

Modise said COP28 was particularly significant because it was where the first global stocktake would happen to assess progress made in meeting the terms and conditions of the international treaty on climate change adopted in Paris in 2015.

“Although Africa has contributed the least to the climate crisis, it is experiencing disproportionate climate change consequences which manifest in social and economic under-development, an energy poverty crisis and rising inequality,” Modise said.

She added that African countries would be looking to COP28 for strategies that would strengthen the continent’s resilience and ability to withstand climate risks.

Nedbank said South Africa faced significant interrelated challenges such as high CO2 emissions, poverty, inequality and unemployment.

However, through initiatives such as the Just Energy Transition, the country was making strides towards addressing these challenges and transitioning towards a more sustainable future.

Nedbank said the Just Energy Transition Plan was crucial, necessitating collaborative efforts across government, business, and society.

“A Just Transition presents opportunities to address developmental challenges in South Africa in a systemically sustainable manner. It has the potential to be a new and sustainable engine for growth and it can be a net generator for decent jobs that can contribute significantly to poverty eradication and social inclusion.”

From a banking and financial perspective, Nedbank said banks played a crucial role in implementing COP commitments made by local national governments and supported by civil society and the private sector.

It said that banks were instrumental in mobilising and delivering climate finance for mitigation and adaptation actions and aligning their operations and investments with the goals of the Paris Agreement.

Meanwhile, COP28 President Dr Sultan Al Jaber yesterday announced the first major milestone of COP28 delivering a historic agreement to operationalise the Loss and Damage Fund, which would assist developing countries that were particularly vulnerable to the adverse effects of climate change, known in the negotiations as “loss and damage”.

Al Jaber said hard work of many people over many years had been delivered in Dubai. "The speed at which the world came together, to get this fund operationalised within one year since parties agreed to it in Sharm El Sheikh is unprecedented.”

The UAE committed $100 million (R1.9bn) to the Loss and Damage Fund, Germany $100m, the UK £60m (R1.4bn), Japan $10m and the US $17.5m

That meeting generated recommendations on implementing the Fund, including the provision of essential grant-based support to countries especially impacted by climate and loss. In a comprehensive listening tour, COP28 leadership socialised those recommendations with national governments ahead of COP28, laying the groundwork for yesterday's historic decision.

The Loss and Damage Fund was essential even if the world meets climate mitigation goals because a “locked-in” level of warming already impacts particularly vulnerable communities being hit by extreme weather events, such as storms and floods, reduced agricultural productivity, and rising sea levels.