This newsletter gives you highlights of selected sustainability insights that were, perhaps, too long (you) didn’t read (TLDR) or there’s just too much out there to read. The highlights presented cover insights gleaned from a global, regional (African), and national (Kenyan) perspective. Happy reading!
The World Economic Forum’s (WEF) Global Risks Report 2024 highlights findings from the WEF’s annual perception survey bringing together insights from +1500 global leaders (academia, business, government, civil society and international community) and +200 experts. This year’s report considers risks in our times of ‘transition and governance systems being stretched beyond their limits’, states the report’s MD, Saddia Zahidi in her introduction.
Here are some insights gleaned from the report:
There are 4 key systemic factors that will shape risk for the next decade:
- Climate change – global warming and its consequences to Earth’s systems. (Unfortunately), older generation decision-makers consider this less pressing in the short term than younger generations; which is a problem for the actions needed now to avoid long term consequences.
- Demographic change – global demographic changes worldwide. Changes in size, growth and structure of populations e.g. ageing and youth dividends, involuntary migrations e.g. due to conflict, climate, etc. create critical shifts that can influence politics, economy and social stability.
- Technology acceleration – misuse of, abuse of, and false information continues to exacerbate social and political cohesion, and perception of reality are getting even more distorted and truth more elusive. Technology gaps between haves and have nots will widen creating more inequity.
- Geopolitical power – evolution and shifts in the sources and concentration of geopolitical power. State fragility, information abuse, technology, climate change and demography will all play into geopolitics and power at an international level.
In the short term (next 2 years), our global socio-economic vulnerability and triggers will be amplified e.g. economic slump, conflict, mis- and dis-information, climate impacts.
For the next decade, globally, climate change and our Earth systems will be the priority and will truly and fully test our adaptive capacity (broadly, our ability to cope with damage, respond to consequences, look for opportunities), lack of trust in information and the impacts of technology will also take the stage.
My two-cents: The next couple of years will be critical e.g. for our Earth systems, equity and justice, international cooperation, political economy, and more. Although it may all look bleak – the future is not yet set in stone. 2024 looks full of shifting dynamics, voters electing leaders, and lots of spinning plates up in the air. What will our leaders focus on or drop? I hope you’ve done your warm-up already. Now put on your running shoes, get your support gear and your centering music, we are headed into a marathon and not a sprint.
The hype is settling as this year kicks off, but hopefully the December COP28 outcomes will reverberate into 2024 and beyond. World Resource Institute (WRI) provides useful insights into the Dubai climate talks outcomes, and here are some highlights:
- Speed up shift to clean energy from fossil fuels – finally transition away from fossil fuels is decided (it’s taken 30 years) so that we can achieve net zero by 2050; and triple renewable energy capacity and double efficiency by 2030. Not surprisingly, there’s lots of loopholes in the UAE Consensus on the transition and much of the detail will need to be worked out at a national level and Nationally Determined Contributions (NDCs) for submission in 2025.
- A loss and damage fund up and running – this fund will help vulnerable countries deal with climate impacts beyond what people can adapt to. About $700M is now in the fund, but this is nowhere near the reality of cost of damage these countries will face, its only 0.2% of what’s needed annually. Multilateral institutions like the UN and World Bank will have a critical role in making this fund a reality.
- Global Goal on Adaptation established – this goal is about enhancing adaptive capacity, resilience and reducing vulnerability to climate change. It’s very early days on this and the framework needs clarity including on the financing for this goal.
- Climate finance deferred to COP29 – countries failed to meet the $100billion goal in 2021, and any new climate finance goal needs to take the needs of developing countries into consideration. This new goal, the New Collective Qualitative Goal (NCQG) will be the issue at the next COP with negotiations and discussions this year paving the way to develop a framework and text in time for COP29 in November 2024.
- Strengthen national commitments – the global stock take revealed the glaring gap between national policy, action to reduce emissions and what is required to achieve the Paris Agreement. Current global policy and action gets us to 2.7C degrees, when we need to get to 1.5C with 2.0C degrees max. More ambitions national policy and action is urgently needed and preparation for updated NDCs starts this year.
- No decision on carbon markets – carbon markets as part of the Paris Agreement (Article 6) proved too tricky to align and was deferred to COP29.
- Food is a global priority – 195 countries covering 80% of the world, committed to include food systems and food into their NDCs by 2025. This milestone declaration paves the way for sustainable agriculture, resilient food systems and climate action.
- Cities as partners in climate action – integral to national and global climate action, cities will play a vital role in climate ambition and action e.g. key economic centres, emissions contributors, centres of populations and communities; and are the frontline of a climate crisis. The Coalition of High Ambition Multi-level Partnerships (CHAMPS) Initiative, bring urban areas (states, cities, towns) into national action plans.
- Increased momentum to curb Methane emissions – more countries joined the Global Methane Pledge to cut Methane emissions by 30% from 2020 levels by 2030 and concerted action by governments, companies and philanthropies were made e.g. The US new regulations to cut Methane emissions by 80% by 2038.
- Additional commitments to halt and reverse forest loss and land degradation – various announcements were made to provide financing to protect and restore nature and there was a commitment towards the participation and involvement of local communities in the Joint Statement on Climate, Nature and People endorsed by 18 countries.
My two-cents: It’s great to see fossil fuels finally on the chopping board! However, our current realities and struggles with the cost of living, fuel costs, lack of access to renewables, etc. are likely to be stumbling blocks on the much needed climate actions needed at a national level. Over 4Bn people are to vote in 2024, these elections will probably sway the pendulum on how important climate action will be by the leaders’ voters bring to power.
Nature and biodiversity are starting to take centre stage (finally) as integral to life on this lovely planet we call home. More than half of the global GDP depends greatly on nature, over 1Bn people rely on forests for their livelihoods; and nature is our best defense against climate change. So it really shouldn’t be a surprise that nature needs to be a priority.
In Africa, a report by the African Natural Capital Alliance (ANCA) showed that 62% of Africa’s GDP depends on nature services and 70% of Africans south of the Sahara depend on forests and woodlands. Africa represents about 16% of the world’s forested areas and is the world’s largest wooded land area – 90% of the continent’s forests are natural, and 10% are planted. The DRC’s Congo Basin is the world’s 2nd lung (Amazon being the 1st) absorbing the world’s carbon emissions – and the equivalent of Africa’s total emissions. The catch with forests is that Africa is losing natural forests faster than we care to plant.
Africa’s West coast provides 20% of the world’s fish harvest. Destructive farming, mining, logging, fishing practices are wiping out Africa’s nature and biodiversity. 65% of productive land on the continent is degraded, and doesn’t produce enough food to feed its populations yet still has 60% of the world’s potential arable land. The fundamental need for natural resources for survival-life and livelihoods, will exacerbate conflict and migration across the continent (and elsewhere).
Globally, we (are beginning to) realise that nature is essential for society, economies and financial systems. The landmark UN Biodiversity Agreement, will require large and transnational companies and financial institutions to monitor, assess and transparently disclose their risks, dependencies and impacts of biodiversity on their operations, supply and value chains and portfolios. This is important because our natural resources are being used to produce goods and services for society, businesses and the economy and returns for financial systems. Agriculture, food and beverages, tourism/hospitality, construction, are some examples of industries with significant nature-related risks, while other industries will hold nature-risks in their supply chain.
The Taskforce on Nature-related Financial Disclosures (TNFD) in late 2023 provided recommendations for financial institutions of all sizes to integrate nature-related risks as core and strategic risks alongside climate change. Evidence is growing on the severity and frequency of nature related issues impacting businesses, capital providers, financial systems and economies. Of the 320 organisations piloting (early adopters) of the TNFD guidelines – only 4 African countries have organisations piloting nature-related financial disclosure (Angola, Ethiopia, Kenya, South Africa).
Nature will continue to be at the centre of Africa’s present and future prosperity – and the world’s e.g. Microsoft recently signed one of the largest ever nature-based carbon removal agreements in Brazil around re-forestation. Debt-nature swaps are emerging instruments that can offer financial solutions for the continent e.g. Gabon’s debt-to-nature swap, and Ecuador recently effected the largest debt-nature swap for USD 1.6Bn. News reports indicate Kenya is also exploring sustainability swaps for its debt repayment.
Africa’s natural resources, biodiversity are at the heart of prosperity for the continent. The Nairobi Declaration firmly positions nature, biodiversity and green inclusive growth as pathways for Africa’s sustainable development. Financial institutions on the continent are a key lever to protecting and responsibly unlocking nature opportunities.
My two-cents: Nature and its services are a priority – yes, yes, another. We can’t live without fertile soils, insects for pollination, fresh water, plants and trees for food and oxygen, etc. So yes, it’s a priority and institutions, private sector, citizens and residents on this continent will need to start making it so.
In mid-December 2023, Kenya and the EU signed their Economic Partnership Agreement (EPA), the European Commission described as the ‘most ambitious with an African country’ because of its sustainability credentials.
From a sustainability perspective, the agreement has:
- Binding and enforceable provisions on respecting workers’ rights, gender equality, environment and climate.
- Focus on delivering on the Paris Agreement on climate change
- Tackling illegal logging, fishing and wildlife trade
- Civil society engagement in the implementation of the agreement
- Dispute resolution mechanisms to foster enforcing sustainability
- Review clauses to strengthen sustainability provisions
The agreement opens the EU market to Kenya’s products, creating more opportunities as Kenya’s primary export hub with trade between Kenya and the region already hitting Euro 3.3Bn in trade in 2022. Kenya’s exports are: vegetables, fruits, and flowers; while imports from the EU are: mineral and chemical products, machinery. Kenya’s market will also be open to EU products, but the EPA has safeguards allowing gradual market access given Kenya’s development needs. Overall agreement aims to move from ‘aid to trade.’ The EPA will come into effect after consent from the EU Parliament.
My two-cents: The EU has a number of sustainability related directives and regulations issued over the past few years that are now coming into force addressing corporate sustainability due diligence and disclosure covering global value chains. International sustainability guidelines and frameworks are hitting home in Kenya and elsewhere on the continent. In my view, these international approaches will play an essential role in accelerating private sector action on sustainability in Kenya, particularly as implementation and enforcement resources and governance may be wanting.