Climate Week NYC, organised by The Climate Group, saw 900 events held between 22 and 29 September. Stephanie Pfeifer, IIGCC CEO, reflects on the week, its core messages, and how they align with IIGCC’s strategy as we adapt to support investor needs.
After a packed week of events, meetings and discussions, the slogan for New York Climate Week 2024 felt extremely relevant - “It’s time.”
For our investor members, this rings true with the hard work of implementing net zero strategies in line with their individual commitments, while acknowledging that an enabling policy environment is fundamental to success.
The UN General Assembly took place against a backdrop of elections, ongoing war in Ukraine and grave developments in the Middle East. But the scale of Climate Week serves as a reminder to world leaders that climate change remains a growing and systemic economic risk that must not be overlooked. Now is the time to act.
Reflecting on our strategy, I left New York with a renewed belief in IIGCC’s direction and the value we can offer to members. The recurring topics of the week, from net zero to nature, adaptation and resilience to emerging markets and the just transition, are central to our work. Here are some of my takeaways.
The climate and nature nexus
Importantly, net zero remained at the core of most discussions. Implementing net zero targets, robust transition plans, the concept of transition finance, and investment into climate solutions were highlighted as areas of focus and key levers of influence for investors.
Our event with the Transition Finance Market Review, hosted by Neuberger Berman, outlined our new discussion paper on the concept of transition finance. Perspectives vary at this early stage, but the paper highlights the need for robust conceptualisation and outlines common principles that underpin robust, credible examples, with more work to come.
Nature was also high on the agenda ahead of COP16 in Cali, Colombia, which begins on 21 October. It follows COP15 in Montreal, 2022, where the Global Biodiversity Framework was agreed, which many consider to be nature’s equivalent of the Paris Agreement.
It was at Montreal that we co-launched Nature Action 100, a global investor-led initiative focused on supporting greater corporate ambition and action to reverse nature and biodiversity loss and mitigate financial risk. This was followed in 2023 by investor expectations to support engagements.
Opening the Nature Action 100 event in New York, I reflected on its fantastic growth in such a short period. Building on those expectations, the first set of Nature Action 100 company benchmark results are now being finalised and will be published at COP16. Investors can use its findings to assess the level of nature-related ambition and action from the 100 companies. It can also help companies to understand where they sit concerning investor expectations on nature.
Separately, IIGCC has assumed the role of Secretariat for the Financial Sector Deforestation Action initiative. Deforestation is firmly at the centre of the climate-nature nexus and we aim to promote investor action on the topic, recognising the major economic, systemic risk it presents.
Public and private collaboration
With investors considering the growing threat of physical climate risk, there is the challenge of increasing investment into adaptation and resilience. We lead phase two of the Physical Climate Risk Assessment Methodology (PCRAM) to advance thinking in this space.
Phase one highlighted that investors who have adopted PCRAM have seen improvements in how they integrate physical climate risks into their investment processes. The next phase will broaden its application across various industries, with a new discussion paper set to coincide with COP29.
Core to this are the right policy signals from governments and, as the tenth anniversary of COP15 in Paris approaches, the topic of Nationally Determined Contributions was a recurring theme in New York. At a high-level roundtable with a range of government, NGO, investor and company stakeholders, I highlighted the opportunity countries have as they set new NDCs to develop more comprehensive plans that can attract long-term private investment.
This collaboration between public and private stakeholders is even more crucial to the success of emerging markets and developing countries. Greater investment in the energy transition of the global south is sorely required.
I referenced our paper on making NDCs investable, which presents investor needs on the topic. Providing more granular detail on sectoral pathways and the underlying macroeconomic context, and quantifying investment needs are some of the recommendations it outlines.
Doing so can have a direct and positive impact on the just transition of communities and workers most affected by the transition. Disruption does not need to be a net negative. Investors are acutely aware of this balance, as evidenced by the popularity of our new working group on the just transition.
The will to act
What is clear is that the next 18 months are critical, with the biodiversity and climate COPs set to take place before the end of 2024 alongside the US election. The New Collective Quantified Goal on climate finance is top of the agenda for world leaders in Azerbaijan and vital to furthering ambition in this space – ahead of the COP, I intend to outline how its ambition can influence investor action.
From there, all eyes will be on Brazil, home to most of the Amazon rainforest and the unique position it has as COP30 host.
Each organisation must do its part, cognisant that no one can do it alone. At IIGCC we will continue to build on our strategy, addressing the challenges facing investors and working with our members to support them in individual net zero commitments.
Undoubtedly, world leaders balance immense challenges in the short term, but events like Climate Week NYC serve to remind them that one eye should always be on climate. Personally, I leave with the belief that while the challenge is great, there is also a huge will to act.
If you’d like to take part in our working groups and help shape the outputs of our resources, why not get in touch today to learn more about becoming a part of IIGCC?