SUSTAINABILITY TLDR NEWSLETTER: EDITION 28

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!

GLOBAL 

COP29, Baku  

The much-awaited United Nations Climate Change Conference (UNFCCC) Conference of the Parties (COP) 29th edition took place in Baku, Azerbaijan in November 2024. The conference marked significant progress in climate action while also highlighting challenges for future efforts. Key achievements included:

1. Climate Finance: Developed nations pledged to triple their annual climate finance commitment to $300 billion by 2035, aiming to help countries adapt to climate disasters and accelerate the clean energy transition. While ambitious, this goal still falls short of the trillions required for comprehensive global climate action.

2. Carbon Markets: COP29 finalized long-awaited rules under Article 6 of the Paris Agreement. These provide frameworks for bilateral trading and a centralized carbon market mechanism, ensuring transparency and environmental integrity. Developing countries are expected to benefit from new financial inflows and capacity-building support.

3. Loss and Damage Fund: The conference operationalized a new fund, with $800 million pledged to support adaptation efforts in vulnerable countries.

4. Enhanced Climate Reporting Standards and Transparency Initiatives: Advances in climate reporting were made, with several nations submitting Biennial Transparency Reports. The Enhanced Transparency Framework tools and related training programs aim to ensure accountability and identify financing needs.

5. Nationally Determined Contributions (NDCs): Countries are required to submit updated NDCs by February 2025, emphasizing the need for ambitious, actionable climate plans that integrate private sector involvement.

Despite these steps, challenges remain, particularly in scaling financial commitments to the levels necessary for meaningful change and ensuring accountability in climate finance. The transition away from fossil fuels also requires more urgent action.

COP29 sets the stage for further action and dialogue at COP30 in Brazil, with stakeholders emphasizing the need for stronger commitments to meet global climate goals.

My two-cents: The decisions made at the COP29 such as creating a new fund and new emphasis on NDCs and developing countries are critical in making peace with nature and addressing the damage already done on our planet.

I believe that creating a level playing field in the carbon credits markets presents a huge opportunity for developing countries in Africa. The countries have vast lands that they can convert into carbon sinks such as forest for trade. Again, streamlining the market will allow revaluation of national wealth to reflect biodiversity and natural wealth.  

A major issue that I believe COP29 could have addressed and perhaps should be addressed in upcoming conference(s) is unsustainable government subsidies for fossil fuels and unsustainable agriculture. Some developed countries such as Belgium Germany, Italy, and France continue to subsidise fossil fuels thereby increasing their use and exacerbating the emissions situation. In total, about 2% of the global GDP is allocated to subsidies that could otherwise be directed towards climate action and mitigation.

Biodiversity COP16 (21 October – 1 November 2024)

The Conference of the Parties (COP) to the Convention on Biological Diversity (CBD) is a conference parallel to and under the UNFCC COP. Established in1992, 150 nations signed the Convention on Biological Diversity, a global agreement to support sustainable development by protecting the web of life on Earth. The 16th Conference of the Parties (COP) to that agreement took place in Cali, Colombia from 21 October – 1 November 2024. Themed making peace with nature, the conference discussed ways that humanity can utilize nature to address climate change. Key issues worth noting from the conference are as follows:   

1. Inclusivity and Local Engagement: COP16 marked a shift towards broader societal engagement, involving Indigenous and local communities through the establishment of a UN Subsidiary Body.

2. Kunming-Montreal Global Biodiversity Framework (KMGBF) Funding: The KMGBF is an international agreement that aims to protect and restore biodiversity by 2030 adopted in 2022. The conference approved USD 2.42 billion in direct support to the KMGBF.

3. New Initiatives:

   • The Cali Fund aims to fairly share benefits from the use of digital sequence information. This requires companies in various sectors such as pharmaceutical, agriculture, and health that utilize deoxyribonucleic acid (DNA) or ribonucleic acid (RNA) data from nature to commit 1% of their profits or 0.1% of revenue to diversity protection that directly benefits developing countries and Indigenous Peoples and local communities.

   • The Berlin Urban Nature Pact emphasises cities’ roles in biodiversity through green infrastructure. The Pact sets out 7 target areas: (1. Green infrastructure, trees & forests; 2. Blue infrastructure & water management; 3. Food & agriculture; 4. Education & nature experience; 5. Soil health; 6. Co-habitation; and 7. Species & habitats) in the Plan of Action broken down into 28 ambitious and measurable targets covering the following key topics of biodiversity action. Signatories are required to meet 15 out of 28 targets by 2030.

   • The Kunming Biodiversity Fund (KBF), launched at COP 16 with a US $200 million contribution from the Government of China. The KBF supports accelerated action to deliver 2030 Agenda and SDG targets and 2050 goals of the Kunming-Montréal Global Biodiversity Framework, particularly cities in developing countries.

4. Challenges in Financing: Despite the proposed $200 billion for the Global Biodiversity Framework fund, commitments remain uncertain, highlighting an urgency for government and private sector contributions.

5. Nature-Based Solutions (NbS): These were spotlighted as crucial for addressing climate and biodiversity crises but are underfunded, receiving only 2% of climate finance.

6. Urgent Actions Required: Existing commitments must translate into concrete actions to avert biodiversity loss, advocating for regenerative, inclusive leadership and better collaboration between stakeholders.

My two-cents: The creation of a subsidiary body dealing with diversity as well as the Calif Fund bring to the fore the needed innovativeness of climate financing to address the challenges that face us. What is even more interesting is that nature-based solutions could contribute one-third of the emissions reductions needed by 2030, with only 15% of the investment. I am convinced that third world countries that struggle to generate capital for climate action programs should look more into these less costly alternatives.

AFRICA

African Development Bank Group: THE TEN-YEAR STRATEGY 2024 – 2033

The African Development Bank (AFDB) released its new Ten-Year Strategy for 2024–2033 at its Annual Meetings in Nairobi, Kenya in May 2024. The strategy is a blueprint to help Africa address pressing challenges and achieve sustained economic growth. The regional multilateral development finance institution established in 1964 seeks to contribute to the economic development and the social progress of African countries – the institution’s regional member countries. The bank regularly develops developments blueprints that have a bearing on how the rest of the world and especially development partners relate with Africa mainly on investment matters.

The current strategic plan carries over from the previous 2013-2022 strategic plan that focused on two main objectives: improving the quality of Africa’s growth; and the transition to green growth. The 2024-2033 plan also has two key objectives: accelerating inclusive green growth and driving prosperous and resilient economies. Key issues worth highlighting in the current strategy are as follows:

• Investing in women and young people: The Ten-Year Strategy outlines how the Bank will invest in Africa’s best asset: its vibrant young men and women. Africa’s population, which is the youngest and fastest growing in the world, presents the continent with an unparalleled demographic window of opportunity. The Bank will address disparities and promote inclusivity by empowering women and youth, enabling them to contribute meaningfully to sustainable economic growth and prosperous societies.

• Climate change adaptation: Recognising Africa’s vulnerability to climate change, the Bank will promote low-carbon development pathways aligned with the Paris Agreement while safeguarding biodiversity and nature.

• Supporting fragile states and building resilience: Amid rising conflicts, fragility, and political instability in Africa, the Bank will intensify efforts to assist fragile countries. Special attention will be given to tackling cross-border challenges and reducing the isolation of landlocked and remote areas.

• Promoting good governance: The Bank emphasises the importance of economic governance, including domestic resource mobilisation, transparent financial management, and anti-corruption measures. Sustainable debt management practices will also be prioritised to ensure long-term economic stability.

The AFDB’s 2024-2033 strategy definitely aligns with its core mission of reducing poverty and improving living conditions by addressing these areas. Ideally, these steps and actions will likely shape individual member states’ strategic plans in the next decade.

My two-cents: As one of five multilateral development banks in the world, along with the World Bank, the European Bank for Reconstruction and Development (EBRD), the Asian Development Bank, and the Inter-American Development Bank, AFDB plays a crucial role in advancing the African objectives. Global Decision-makers in climate finance and impact investments need to liaise more with AFDB to direct resources where they are needed most.

Africa accounts for 25% of the global biodiversity. With AFDB calling for recalibrating the GDP of African countries to reflect natural assets like forests and carbon sinks, it should lead the course by creating a framework that captures the sustainability wealth or otherwise of African countries to capture the attention of global climate finance.  

Arab African International Bank, IFC, EBRD, and BII Launch US$500Million Sustainability Bond to Support Climate Finance and Boost Micro, Small, and Medium-Sized Enterprises

Climate finance is crucial for Africa, a region disproportionately affected by climate change despite contributing minimally to global emissions. Unlocking sustainable funding is essential to supporting adaptation, mitigation efforts, and the transition to green economies across the continent. The announcement of the issuance of a sustainability bond by a private bank in Egypt, Arab African International Bank, financed by International Finance Corporation (IFC), European Bank for Reconstruction and Development (EBRD), and British International Investment (BII), is a major milestone for Africa.

In the recent past, other African countries have launched climate finance bonds. For instance, Nigeria issued its first green bond in 2017 to fund solar power and afforestation projects. On October 3, 2019, Acorn Holding Limited made history when it issued the first Green Bond in Kenya and by extension, the East African region. Zambia issued its first green bond through its Copperbelt Energy subsidiary on December 29th 2023.

The various debt instruments geared towards sustainability are becoming an important part of global fixed income markets. More and more, investors look to align their portfolios with their financial goals and internationally recognized sustainability goals such as The Paris Agreement or UN Sustainable Development Goals (SDGs). The main difference between in terminology for these instruments arise from the use of the proceeds. There are three broad names:

Green Bonds: proceeds are devoted to financing new and existing projects or activities with positive environmental impacts. It’s critical that impactful green bonds be issued in line with the Green Bond Principles (GBP) from the International Capital Market Association (ICMA) a set of voluntary guidelines that promote more transparent, unified reporting on bonds’ environmental objectives and estimated impact

Social Bonds: the proceeds must finance or refinance social projects or activities that achieve positive social outcomes and/or address a social issues. In many cases, social projects are aimed at target populations such as those living below the poverty line, marginalized communities, migrants, unemployed, women and/or sexual and gender minorities, people with disabilities, and displaced persons.

Sustainability Bonds: proceeds are used to finance or re-finance a combination of green and social projects or activities. These bonds can be issued by companies, governments and municipalities, as well as for assets and projects and should follow the Sustainability Bond Guidelines from International Capital Market Association (ICMA), which are aligned with both the Green Bond Principles (GBP) and Social Bond Principles (SBP). They can be unsecured, backed by the creditworthiness of the corporate or government issuer, or secured with collateral on a specific asset.

My two-cents: Green, Sustainability or Social bond, the difference is largely semantic. What is clear is that these tools are under-utilised and have the potential to close the financial gap in Africa’s climate adaptation goals. As there is no shortage of economic sectors on the continent in need of greater resilience, the opportunity for scaling green bonds in Africa is enormous. Think of every climate-related challenge in Africa as a potential new type of bond.

KENYA

Kenya Outlines New Waste Management Policies for Sustainability

During the COP29, in Baku, Environment Cabinet Secretary, Aden Duale, announced the introduction of The National Sustainable Waste Management Act 2022, that in part mandates households to separate their waste into three categories: organic waste, dry recyclables, and hazardous items. The law also has provisions for Extended Producer Responsibility (EPR) that call for manufacturers to recycle packaging materials for their products. This law is a culmination of the government efforts to achieve its sustainability agenda and NDCs. The idea of waste separation was first introduced into the public by the national government through the National Solid Waste Management Strategy released by the National Environmental Management Authority (NEMA) in 2014. This new law will allow the public to directly participate in climate action and enable the government to achieve the overarching goal of transitioning to a circular economy model to boost efficiency in resource use, cut down on waste, and open up new avenues for financial growth.

Kenya’s Sustainability Achievements and Global Recognition: 

EarthShot Winners 

The country stands out for its efforts in biodiversity conservation efforts, protecting iconic wildlife and ecosystems captured by 90% of power being from renewable sources, world renown game reserves such as Tsavo and Maasai Mara. More recently, innovative green solutions and community-driven initiatives driven by a young dynamic population are justifying Kenya’s place as a leader in paving the way for a sustainable future, harnessing renewable energy, conserving biodiversity, and championing green innovation. As a testament to this prowess, two Kenyan firms were recognized in the 2024 EarthShot Prize one as a winner and the other as a finalist. D.Light, which offers affordable and sustainable solar energy solutions, was a finalist in the Clean our Air Category. Keep It Cool, the ultimate winner in the Waste-Free World category, employs technology and innovation to provide a smart distribution platform known as Markiti. It leverages on decentralized off-grid and on-grid cold storage facilities, the platform reduces post-harvest losses and guarantees market access for small-scale farmers and fishermen.

Elsewhere, Mega Gas Alternative founder, Peter Njeri, won the Waislitz Global Citizen Award in 2023 for his contribution in clean energy that converts plastic waste into clean cooking gas. Another Kenyan, Esther Kimani also won an award in the same event for a solar powered artificial intelligence-based crop pest and disease detection device.

My two-cents: The accolades Kenyans are receiving on the global stage should inspire the global financial bodies, the national government and private investors to prioritize local solutions for local challenges. These awards prove that with proper investments in our local talent, the country can address cyclical and recurring challenges like climate change, hunger, sanitation, housing, poverty, and unemployment by empowering our youth to excel in innovations and expertise. Perhaps, then, there would be no need to look for employment outside the country.