The September 2019 United Nations Climate Action Summit should be seen for what it is: an essential gathering of world leaders designed to inject greater urgency and resources into the fight against global climate change.
Its timing is opportune because the UN analysis is clear: “Global emissions are reaching record levels and show no sign of peaking. The last four years were the four hottest on record, and winter temperatures in the Arctic have risen by 3°C since 1990. Sea levels are rising, coral reefs are dying, and we are starting to see the life-threatening impact of climate change on health through air pollution, heatwaves, and risks to food security. The impacts of climate change are being felt everywhere and are having very real consequences on people’s lives.”
The UN prescription for what to do is equally clear: “Affordable, scalable solutions are available now that will enable us all to leapfrog to cleaner, more resilient economies … (these solutions) should not create winners and losers or add to economic inequality; they must be fair and create new opportunities and protections for those negatively impacted, in the context of a just transition. They should also include women as key decision-makers: only gender-diverse decision-making has the capacity to tackle the different needs that will emerge in this coming period of critical transformation.”
The goals of the UN align closely with how we at FinDev Canada approach and execute on our mission. Overall, our mandate is to support innovative businesses in the developing countries of sub-Saharan Africa, Latin America, and the Caribbean that are active in three sectors: green growth, agribusiness, and financial services.
Through our green growth initiatives, we work side-by-side with firms that are developing and implementing climate solutions focused on both mitigation and adaptation. We devote resources to companies working in renewable energy, energy infrastructure, energy efficiency, water supply and management, waste and wastewater management, bio-refinery products, and green industrial production.
The goal is to build on and amplify the net positive impact that these businesses can have in their immediate areas of operation, as well as to enable others farther afield to learn from successes. We always begin with critical questions around impact and how to maximize it, for example, by considering how a project can improve the environment, boost women’s empowerment, or raise levels of employment.
A good example of this approach is our recent multi-million dollar loan to Peruvian firm Danper Agricola La Venturosa. The funds will, simultaneously, help to improve environmental management systems, create jobs, and support women’s economic participation in the country’s agriculture sector. The company is a leader in environmental and sustainability management and has implemented international best practice throughout its operations.
Similarly, we committed USD 20 million to Climate Investor One and its Construction Equity Fund to support transitions to renewable energy in emerging markets. As a result of the Fund’s work, approximately 1.2 million tons of CO2 emissions will be avoided. Climate Investor One is helping to fast-track 1,100MW of renewable energy, benefiting eight million people and mobilizing private capital. The final closing of the fund, at a combined USD 850 million, went well above its goal of USD 530 million. In addition to the positive impact in climate change mitigation, CIO-supported projects are expected to create over 25,000 temporary and permanent jobs.
With Danper and Climate Investor One, we’re showing that being client-focused and results-oriented, following pragmatic and time-sensitive practices, and offering investors and partners solutions to reduce risk in environmental projects can lead to positive results for all.
People in developing countries can see their lives improve through smart adaptation practices. In general, the environment can benefit as mitigation efforts lead to fewer carbon emissions and contribute to stabilizing global warming. Local and regional economies can see “green” jobs being created and economic growth becoming more sustainable. And, investors can be assured that, from a risk-return perspective, their investments are not just financially viable but also contribute to sustainable impacts from multiple perspectives.
In our view, all these gains are not just desirable, they are eminently achievable, but only through partnership. It’s recognized that private sector actors will provide the bulk of financing for climate initiatives in the decades ahead. Their investments can help to unlock solutions that reduce and manage risk in environmental projects, leading to net positive outcomes. Working with FinDev Canada, we can demonstrate together that investing in good projects, with solid and sustained impacts, can lead to better returns.
Our hope is that private sector leaders, whether from Canada or elsewhere, will appreciate that investing alongside and in partnership with FinDev Canada can open doors to the kind of climate action that the world needs and is waiting for.