This year’s COP takes place in Dubai under the theme “Unite, Act, Deliver: A Transformational COP28 for Climate Action.” Heads of state, business leaders and activists will convene at Expo City in Dubai for 12 days to hash out policy agreements and frameworks towards climate adaptation and mitigation. Although dominated by diplomatic debates and discussions, the private sector has always been a part of the Conference of the Parties. Both public and private financiers were integral to COP26, and the issue of loss and damage finance on the COP28 agenda will involve national governments and private enterprises. Beyond COP28 and climate summits in general, the private sector has a dynamic role to play in securing a green transition and climate initiatives and policy.
Financing for start-ups, national projects and climate funds. The most significant contribution that the private can and is making is through financing. Developing countries will require $2 trillion annually by 2030 to achieve net-zero by 2050. The Global Financial Stability Report by the International Monetary Fund shows that the private sector will need to provide 80% of the investment needed into emerging markets and developing economies. Although the private sector does not directly finance multilateral banks such as the Green Climate Fund, there is a close relationship between the two. Research from the International Finance Corporation shows how multilateral development banks mobilise private finance for development projects and initiatives, which contribute to sustainable growth and mitigating the effects of climate change. Private financing is also instrumental for the start-up sector. Estimates put global private investment into startups between USD445 billion and USD580 billion. This funding is vital for the start-up ecosystem. In North America and Europe alone, there are over 45 000 climate tech startups and scaleups, with 83 climate tech unicorns globally. These unicorns work in renewable energy, battery manufacturing, agriculture and carbon capture.
Supporting sustainable business practices within their industries. The private sector is a significant player in the global economy. Estimates suggest it contributes over 60% of GDP in most countries, including dynamic emerging markets. Comprising of both large corporations and micro, small, and medium enterprises, the private sector influences global consumption, national economies, employment rates and wealth generation. The top 200 global corporations account for a quarter of the world’s GDP. As such, the adoption of climate-friendly practices and sustainable pledges could lead to a wider shift in their respective industries. Several large corporations have already made such pledges. Microsoft aims to be carbon neutral by 2030. IKEA has committed tosourcing all its wood from sustainably managed forests by 2030 and reducing waste across their operations. Although there have been critiques of such pledges as mere greenwashing, companies that stand by their commitments establish alternative methods and practices while maintaining profitability.
As climate negotiations continue and global agreements and frameworks are forged, stakeholders in the private sector can play their own unique part in adaptation and mitigation, the green transition and resilience building. As a private company, Ghazan Global is committed to investing in and supporting companies and technologies working towards a sustainable future.