Climate Week wrapped up last week in New York City. How did it play out, and what questions are we asking heading into COP27, the United Nations Climate Conference taking place in November?
1. Climate Week convenes leaders from business, government and the climate community through hundreds of events held across New York City with the goal of driving climate action.
This focus on action is not surprising — after all, the tagline of this year’s Climate Week NYC was “Getting it Done.” And throughout the week, the theme of “systemic transformation” came up repeatedly. But that’s easier said than done. In a fast-growing global sustainability market, how do you move from lofty goals to credible action?
Part of the answer lies in better data, increased accountability, more consistent standards, and knowing how to measure what matters.
2. But adding evermore data isn’t a panacea. You also need to be able to interpret and explain that data, and in a way that resonates across silos. If you can’t communicate effectively in plain English, how can you solve the big, thorny climate problems the world faces?
There’s a lack of consistent definitions around ESG and sustainability, and we heard during Climate Week about the challenge that is creating. Much of the debate right now is about the language we use when we talk about ESG and sustainability. That language needs to be clear and precise, and those definitions need to be developed in concert with a wide range of stakeholders.
3. That brings us to our third takeaway from Climate Week, and the related question it raises: We know the world needs concrete action, and we know such action requires effective coordination and communication. How do you promote more efficient partnerships between the public and private sectors? During Climate Week, we heard a lot about the role of blended finance in addressing climate change, and a lot about the importance of collaboration and cooperation. But barriers remain.
There is some cause for hope. COP is a United Nation event, and in 2021 we saw a big increase in private sector participation. We will be looking to COP27 in Sharm El Sheikh to build on this momentum.
4. COP27 isn’t the only Conference of the Parties on the horizon: The second leg of the Convention on Biological Diversity, known as COP15, is slated to take place in Montreal in December.
Our data at S&P Global Sustainable1 indicates that nature and biodiversity are climbing the agenda for some companies, but corporate commitments remain rare. And that’s another question that emerged during Climate Week: How does nature fit into the energy transition?
Again, it’s partly a question of communication. Nature is incredibly complex. You need to start by finding language to effectively communicate to corporate leaders how to define nature and why it’s relevant to their business.
This is what the Taskforce for Nature-related Financial Disclosure, or TNFD, is working to provide: A framework for companies and other organizations to report on evolving nature-related risks in order to shift global financial flows toward nature-positive outcomes. S&P Global is a member, and recently launched a nature and biodiversity Knowledge Community. We are working with UNEP-WCMC to help investors, banks and companies gain insight into how nature and biodiversity data can be applied in a decision-useful way to seek better financial outcomes.
At present, many companies don’t understand their exposure to nature risk. And that makes it difficult to understand the complexities of nature risk fits into conversations about the energy transition. One key theme that came out of Climate Week is that we cannot be net zero without being nature positive.
5. It’s human nature to seek out simple narratives (for example: lists touting ‘5 key takeaways’). But the sustainability world is complex, and there are no quick and easy answers. For example, when planning for the energy transition, stakeholders also need to consider how to make those plans just and equitable; net zero goals need to consider the impacts on nature; amid the ongoing Russian invasion of Ukraine, economies are facing tough choices about how to balance their immediate energy security needs and energy affordability with longer-term energy transition plans.
This leads to our final question that emerged during Climate Week, which will carry us into COP27: What tradeoffs should you make to strike the delicate balance that is needed across the sustainability world?
Climate Week demonstrated the huge number of intelligent stakeholders and the high level of energy they bring to these thorny questions. At S&P Global Sustainable1, we’ll keep using data to help understand and explain these problems. On the ESG Insider podcast I cohost for S&P Global Sustainable1, we’ll keep talking with a wide range of stakeholders from the public and private sector and asking the hard questions, in hopes of getting closer to solutions.