One more year New York Climate Week within the framework of the United Nations General Assembly, held last week, has proven to be the most important meeting point along with the COPs for promoting the sustainability agenda in the world. Some voices suggest that the anti-ESG movement and the global geopolitical context marked by conflicts, uncertainty and trade tensions is causing sustainability to lose prominence. There are those who even mark the beginning of the end.
In my opinion, the week we have experienced precisely in New York is an unequivocal sign that sustainability is more alive than ever. And it is because sustainability increasingly makes economic sense. What those of us who have attended have been able to see is that sustainability is increasingly linked to competitiveness as the Draghi report points out and that even a change in color after the elections in the United States is expected to have limited impact on the implementation of the Inflation Reduction Actalthough in the short term it may represent a setback in global climate governance.
Today we move towards an evolving sustainability, with new challenges and opportunities that have played a leading role in many of the conferences and events held throughout that week and that have been defining this new phase.
Firstly, the commitment and progress made by the business sector has been reaffirmed. The more than 130 global companies that are part of the Alliance of CEO Climate Leaders, promoted by the WEF and with total income of 4 billion dollars, we have managed to grow our income by 18% while we have reduced our emissions by 10% between 2019 and 2022. If we focus on the financial sector, the Net Zero Banking Alliance which includes 144 banks in the world has published the progress report with 97% of banks with intermediate objectives set in the most emissions-intensive sectors.
However, it has also been confirmed that we are just getting started and, therefore, we need to innovate, scale and accelerate. Transforming the energy and production system that we have created since the mid-19th century requires titanic work. As McKinsey pointed out in one of its sessions, Only 10% of the technologies we need to achieve a net zero emissions energy system are deployed at the necessary scale.. As President Biden said on this occasion, in his speech at the Bloomberg Business Forum in New York “it is the perfect time to act big… we have to believe in our possibilities.”
And here we come to the third nuclear element of this new phase of sustainability. The investment for the transformation of our world will be made 80% by private companies. And for this investment to be made, a fundamental precondition is necessary: a regulatory environment that facilitates it, which has ambitious, clear, predictable climate industrial policies and demand policies, with the appropriate incentives to innovation in emerging clean technologies (cleantech)with more agile processes to deploy the technologies already available at scale and with full integration of a just transition. Only in this way can we from the financial sector play our fundamental role in this transformation, which is none other than facilitate the mobilization of financial resources so that companies, institutions and families can invest in sustainability. What we have seen this week is that more and more companies are joining this urgent call to governments to create this environment conducive to investment.
Another important element in this new phase of sustainability is the alliances that have been talked about a lot in New York and that they have an increasingly relevant role if we want to address this problem in a transversal and global way. Alliances between different sectors to address confluent challenges. Public-private alliances to reach places where neither one nor the other can reach on their own. A good example would be the momentum that one is living in what is called blended financefinancial solutions that allow combining public financing and guarantees that allow private capital to scale to mobilize more financial resources, especially in emerging countries. And of course also the sectoral alliances that allow us to address sustainability challenges.
And finally, the week served once again to point out that it is critical to have transformative leadership at the helm of our governments and our companies to drive systemic change. As Ortega y Gasset said “it is only possible to progress when you think big, it is only possible to advance when you look far away.” We need bright-sighted leadership that recognizes the role that each of us has, that has the courage to address enormous challenges and that is persevering in its mission and objectives.
If I had to summarize in a few brief lines these five elements that I have been able to verify this week, I would say that We move forward, but we must accelerate. That we urgently need governments to create a favorable environment for investing. That we all need each other and we must work together for systemic change, with alliances and leadership at the level of what we are at stake.
