It is almost the end of 2020 and I think it is safe to say that this has been an eventful year. The world is still suffering from the COVID-19 pandemic, the lockdown measures and it’s economic consequences. But there is also something else to note about 2020: with a global average temperature of 1.1°C above estimated pre-industrial levels, we are far off track from meeting either the 1.5 or 2°C targets called for in the Paris Agreement. This worries me. And I strongly believe that the urgency we feel in addressing COVID-19, should also be felt for addressing climate change: it is a crisis that is imminent and already affecting people all over the world, amongst whom our customers in emerging markets. As Kitty van der Heijden already indicated in the first edition of Future-minded: ‘If governments don’t now seize this opportunity to invest the trillions of dollars in rebuilding our economies in a sustainable way, it’s the end of civilization. But if we do, we have a unique opportunity to accelerate the transition in a way we simply couldn’t have done pre-Corona.’ Like Kitty, I believe governments, as well as businesses and all other players, should use the lessons learned and build back better, and accelerate the transitions needed to achieve the Paris Agreement.
I was pleased to see that in the run up to the Finance in Common Summit (the first global summit of all public development banks), the European Development Finance Instutions (EDFI) announced their joint commitment to phase out fossil fuels and mobilize private sector climate finance, aligning with the Paris Agreement and high disclosure standards. Ten years ago, to prepare for a new role within FMO as manager Sustainability Development, I followed a course at the Erasmus University in Sustainability. The vast complexity and the global interdependencies of the climate issues were an eye opener for me. Everything you do, use or buy has an influence on climate, often on a global scale, because of the international production and supply chains.
One of the main issues is the sustainable development of emerging markets. We cannot deny emerging markets the same privileges that developed countries have, just because there is already too much use of fossil fuels, too much use of minerals and excessive CO2 emissions. But how do we reduce inequalities ánd reach the Paris climate goals? It's a far too complex question to answer in one magazine, but in this edition of Future-minded we do try to cover some schools of thought regarding solutions. Leslie Labruto’s Pioneer Energy Investment Initiative is an example of how investments can contribute to meeting the increased need for energy in developing countries - while reducing CO2 emissions. By helping clean energy start-ups to scale up, her initiative aims to both contribute to sustainable energy access, and rural economic growth. A win-win. In the second episode of our podcast series FMO’s Jorim Schraven compares the 1.5- degrees challenge with a car driving down a steep slope that ends with a cliff edge. We’re now racing downhill and the cliff edge is at 2 degrees. At that point, even if you want to, you cannot reverse the car because natural feedback effects, like melting permafrost, are stronger than the car engine.
“The urgency we feel in addressing COVID-19, should also be felt for addressing climate change.”
The analogy illustrates the need for businesses and banks to build a good dashboard (indicating speed, distance and warning lights) which can help align their strategies with a 1.5 to 2 degree pathway. At FMO we did this too. We have set a goal to stay on a 1.5- degree pathway with our investment portfolio. And these strategies then get translated into concrete actions to achieve it. Although an ambitious target, I was happy to see that it is feasible while still growing our investment portfolio! If you haven’t watched the documentary ‘Kiss the ground’ yet, I highly recommend it. It shows how soil can hold the key in the fight against climate change. We spoke with our knowledge partner Wageningen University & Research about this topic: there are hopeful signs that sustainable soil management is finally gaining popularity and moving from the fields of science and policy towards implementation. Sustainable use of soil presents a nature-based opportunity to capture CO2, meaning that our agribusiness customers and farmers have an important role to play in the fight against climate change. Something that makes me proud to be part of FMO and hopeful for the future, is the 1.5 degree staff challenge that was launched by our YoungFMO colleagues. Read here how our young colleagues are challenging our staff to green their behavior this year. Our last assignment was on greening your laundry. I already run the washing machine only in weekend and evening hours, when there is less energy demand. But there was also a link to a website that sells climate friendly detergent. I have ordered it, and reminds me of all the small steps I can still take in contributing to the fight against climate change. Dear reader, investing in green and inclusive pandemic recovery makes economic sense. We need solutions that show private investors the way towards these green opportunities in developing countries. I am excited to share some examples of how this can be done through this edition of our magazine. Each of us has a crucial role to play in driving climate action. I believe that the actors, accelerators and disruptors featured in our magazine have shown inspiring ways to do this. Have fun reading and may these examples inspire you to act!
CEO a.i. at FMO