Climate Week NYC is one of the pivotal annual environmental events, taking place concurrently with the United Nations General Assembly meeting, which this year included a Climate Ambition Summit. From 17 September through 24 September, New York City played host to global businesses, governments, academic institutions, and nonprofits who gathered at various events and meetings with a sense of urgency and collaboration. It was perhaps fitting that climate leaders from around the world assembled in New York, as the city itself has experienced the effects of climate change first-hand in the last few months, with the air pollution from the Canadian wildfires enveloping its skyscrapers and flash floods bringing metropolitan life to a sudden standstill. It remains to be seen whether severe and immediate climate impacts on key global hubs may incentivise the financial community to create pathways for money to flow faster to climate initiatives, driving systemic change.
The Pollination team was well-represented across the various events, talks, and meetings that comprise Climate Week, delivering critical thought leadership on topics that were top-of-mind for many participants. Here are our team’s key takeaways from Climate Week NYC:
Nature finance is a critical tool for driving impact
The week kicked off with the launch of the Taskforce on Nature-related Financial Disclosures (TNFD)’s recommendations for corporations and financial institutions. The TNFD provides disclosure guidelines for nature-focused reporting, which positions nature risk alongside financial, operational, and climate risks and serves as a key first step in upskilling businesses and investors to recognise opportunities and catalyse investment in nature-positive solutions. Multiple individuals at Pollination contributed to shaping these recommendations over the past three years, so it was especially exciting to see the TNFD’s launch at the New York Stock Exchange.
Later in the week, Pollination Managing Director Dr. Helen Crowley presented the findings of Pollination’s inaugural Nature Finance Focus report at The World Biodiversity Summit, sharing key insights around nature as an investment. Leveraging perspectives from over 500 global institutional investors and asset managers across six key regional markets, the report found that a significant number of institutions are actively incorporating nature into their investment strategies and pursuing nature opportunities. A substantial group of investors globally are focused on opportunities in the nature space, with 75% of institutional investors surveyed sharing the view that nature-related investments can usefully be classified as an asset class.
The interest in nature-focused investment and the recognition of the need for capital to flow to nature-positive opportunities was evident on the ground in NYC throughout the week. The presence of investors and financial institutions in conversations about nature-based solutions and biodiversity is an encouraging step forward. This was especially true at events convened and hosted by the Sustainable Markets Initiative, in which the Pollination team was actively engaged. For example, the Natural Capital Investment Alliance hosted an event on Driving Investment into Nature—in which PwC, Federated Hermes, Bank of America, and Climate Asset Management participated—and the Financial Services Task Force hosted a Coastal Nature-based Solutions Workshop, co-hosted by Barclays and HSBC.
Many of these conversations highlighted the need for greater collaboration: sharing tools and best practices, delivering innovative partnerships for investment, and otherwise working to educate a wider variety of traditional investors to scale finance for nature. Pollination hopes to catalyse this type of collaboration through its investment and advisory work.
Accelerating the transition requires innovation and greater scale of finance
Climate Week curated many conversations about accelerating a just transition to a net-zero economy. Although this is a complex topic, there was widespread agreement on the financial opportunities this transition presents. In particular, the Inflation Reduction Act received a great deal of airtime due to its ability to catalyse investment in a just energy transition in the U.S.
But more financing is required to accelerate the transition. To deliver a global, economy-wide transition, continued mobilization of institutional investments is needed to deploy infrastructure to support the achievement of the Paris goals, especially in the power sector for both proven and innovative solutions. More early-stage venture funding is required to unleash the power of technology and digital solutions for this transition.
Pollination Managing Director and Global Head of Advisory John Morton moderated a panel discussion focusing on the “New Technologies for an Efficient Transition” at the “Financing the Energy Transition: SDG 7” event hosted by the Business Council for International Understanding and Nuveen. Featuring panellists from Nuveen, AES, FiveT Hydrogen, and the UN Development Programme (UNDP), the discussion touched on the immense technological progress made in clean hydrogen, battery, and offshore wind solutions, the remaining barriers, and the need for continued policy support to further scale financing for solution deployment across markets.
Accelerating the transition will also require greater global innovation and action. It comes as no surprise that the climate finance gap remains large in emerging markets, which will likely drive more than 50% of global emissions increase, and which face a disproportionate impact from climate change. Closing the climate finance gap will require greater innovation and collaboration between public and private institutions in both emerging and developed economies. Pollination has been a leading practitioner in supporting the flow of climate finance and transition solutions in emerging markets. Following our readout from the inaugural Africa Climate Summit in Nairobi and our observation of continued motivation to address these challenges, Pollination looks forward to working with our clients and partners across sectors to resolve the remaining barriers inhibiting financing to net-zero and nature-positive projects around the world.
Across all themes, speakers and participants alike were focused on action. We are pleased to see the rhetoric shift, especially heading into COP28, which is being positioned as “a transformational COP of action”. But delivery on these calls for action remains lagging. The first Global Stocktake Report noted that current efforts would fall far short of the Paris Agreement goal, instead putting the world on track for approximately 2.5 degrees Celsius of warming by 2100. Moreover, many of the world’s most substantial emitters—including the United States, the United Kingdom, China, and the United Arab Emirates (the host of COP28)—were absent from the UN Climate Ambition Summit, which took place during Climate Week. One way to course correct will be to close the significant funding gaps for climate and nature by recognizing and better valuing the investment opportunities and pursuing innovative approaches to crowd in private sector investment. We are eager to continue working with the first movers and innovators to pave the way for others, scaling real action to close these gaps.