The 23rd Conference of the Parties (COP23) to the
United Nations Framework Convention on Climate Change (UNFCCC) was held in
Bonn, Germany in November, and gathered governments, NGOs and private sector
organisations including corporates and investors to discuss climate solutions.
Collaboration remained central to the discussions at COP23, and during the event BNP Paribas Switzerland also announced a new partnership with the Solar Impulse Foundation on the “World Alliance for Efficient Solutions”. The initiative- launched by Bertrand Piccard- aims to help governments and businesses adopt ambitious energy objectives, with a focus on clean and cost-effective technologies.
BNP Paribas sustainability specialists also participated in COP23 events in partnership with the UNFCCC. In a panel organised by the Climate Disclosure Project (CDP), Severin Fischer- Head of environment and extra financial accounting- discussed how to address climate risk in the financial sector. This included a focus on physical risks of climate change and the material impact on supply chains.
Romain Talagrand, Head of Power & Renewable Energy at Energy, Resources and Infrastructure Financing Solutions similarly emphasised credit risk for corporates and investors, during a panel on ‘mainstreaming climate risk’. It was noted that climate risk is beginning to be factored into the analysis of credit risk and impacts ratings and funding costs. It was also identified that corporates and investors that adapt to climate risks could potentially benefit from their proactive approach, particularly in relation to carbon pricing exposures. Additionally consistency in standards and disclosures was prioritised for efficient capital allocation.
A key accelerator of the energy transition is the role of corporates, as noted by Frank Sibert Head of Sustainable Finance BNP Paribas Germany. He highlighted that supporting the target 2 degree scenario requires engagement from corporates in all sectors, and geographies. A solutions driven approach was further emphasised during the press conference of the 2nd Annual CEO Meeting of the Hydrogen Council- a global initiative of leading energy, transport and industry companies with a collective vision for hydrogen to foster the energy transition. At COP23 the Hydrogen Council launched the first ever globally quantified vision of the role of hydrogen, with a roadmap detailing that hydrogen has the potential to develop USD $2.5tn of business, creating more than 30 million jobs by 2050.
BNP Paribas Foundation also had a strong presence at COP23. The organisation held an ‘oceans of impact’ panel in collaboration with UN agencies and leading scientists. Participants recommended a close alignment of the UNFCCC and SDG agenda to ensure preservation of ocean species and dependent economic/cultural processes.
.@BNPParibas is proud to be a partner of #COP23, the UN #ClimateChange Conference. Cecile Moitry, our Sustainable Finance & Investment Director, highlights our commitment to #EnergyTransition and #Sustainability pic.twitter.com/UtFcE6RtRS— BNP Paribas CIB (@BNPParibasCIB) November 14, 2017
Looking ahead to COP24 in Poland next year, the COP23 created the ‘Talanoa Dialogue of 2018’. This is considered a process of inclusive, participatory and transparent dialogue that focusses on collective action, aimed at informing decision-making to move the global climate agenda forward.
Sustainable Finance Director at BNP Paribas CIB
Unblocking large-scale private finance for more resilient societies
The concept of resilience to climate change effects lies at the heart of the Paris Agreement. It is of vital importance that countries have adequate measures and infrastructure to resist extreme and unusual weather-related events such as hurricanes, droughts or flooding. The need for adaptation is paramount, and COP 23 reminded us that financial institutions must take a centre stage in making societies more resilient. How can we unlock large-scale private finance for more resilient societies? The answer is threefold: we need consistency, commitments and collaboration. First, we need consistency with a 2 degree scenario. Beyond the exclusion of sectors such as coal or unconventional oil and gas, financial institutions need to integrate in their risk assessment frameworks physical risks and take an active role in setting standards to factor these elements. The question is then how do you ensure that available financing capacity is appropriately redeployed? Essentially we need commitments, and inherently convictions. Financial institutions are coming forward and committing towards the energy transition through actions including increasing renewable energy financing and applying more stringent CSR policies. By making such public commitments, financial institutions are increasing their accountability and transparency on environmental contributions. Finally, we need greater collaboration between the public and private sector; Bringing together the financing expertise of the private sector, and the scale of the public sector will inevitably foster more innovative financing solutions.