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African financial centres step up efforts on green and sustainable finance

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When we talk about climate change and sustainable development, the continent that is often highlighted as facing the greatest socio-economic challenges is Africa.

It is in many African nations that the impacts of climate change are hitting the hardest and that communities need the most support to ensure food security, decent housing, access to clean energy and so much more, including jobs for the ballooning youth unemployment which is seeing more than 12 million youth enter the labour market each and every year.

The will and the knowledge exist to turn things around. A survey for Africa Climate Week in March showed that most African nations were already starting to implement their mitigation and adaptation commitments under the Paris Agreement.

But over half of the countries have struggled to mobilize climate finance, less than one quarter have a financing strategy, and only one third have appropriate financial instruments.

There is some movement. The World Bank Group has promised US$22.5 billion over 2021-2025 in climate support in Africa, while nations are increasingly able to secure money from the Green Climate Fund.

Private finance is desperately needed, however, which is why the UN Environment Programme (UNEP)-convened International Network of Financial Centres for Sustainability (FC4S) is launching a new work programme for the continent.

Financial Centres for Sustainability, a global network of 30 financial centres, will work with its five Africa member centres—Abidjan, Cairo, Casablanca, Lagos and Nairobi—to encourage strategic action, collaborate with peers across the continent, and facilitate engagement with major international hubs.

“There is an appetite for investing in Africa, in recognition of the fact that of all the investment bets you can make, this is the one that is sure to come up trumps,” said Patrick Njoroge, Governor of the Central Bank of Kenya, at the launch of the new work programme at the Financial Centres for Sustainability’s annual meeting in Geneva. “There is also an appetite to use the members’ investment muscle to do good and help defend the planet against the ravages of climate change and environmental degradation.”

There is, despite many old-fashioned notions about Africa, plenty of private money in the continent. Nairobi, for example, is a thriving regional hub for banks, businesses and entrepreneurs with money to invest.

But there are many barriers to boosting sustainable finance in African countries, including a lack of clear policies and regulatory frameworks on climate change, a lack of awareness on the sources of climate finance and limited engagement from the private sector.

These barriers, and the different levels of development on the sustainable finance agenda in African financial centres, requires a coordinated strategic effort to help mainstream sustainable finance as a foundational element of financial centre development strategies.

The programme will help the centres assess the green finance landscape in their countries and set strategies for sustainable finance development. It will provide technical assistance on specific green and sustainable finance projects, including support on the development of a green bond market in Abidjan, activating the green bond market in Egypt, and a proposal to advance “green tagging” of bank loans in Lagos.

“Financial centres generate a powerful clustering effect by concentrating banking, capital markets, investing, insurance, professional services with policy and regulation,” said Mohammed Omran, Executive Chairman, Financial Regulatory Authority of Egypt. “Financial centres in Africa are no different. We have a real opportunity to turn African centres into global green hubs and provide the finance the continent needs for a brighter future.”

Financial Centres for Sustainability will also increase policy dialogue and engagement, and collaboration between African centres and the rest of the international network.

Specific actions will include setting clear definitions for green or sustainable finance, integrating sustainability priorities relevant for a given national context into the design and execution of strategies, and identifying options to create strong enabling environments to attract international investment into green and sustainable investment options in local markets.

The message is that with the over 3.5 trillion of financing gap for both the nationally determined contributions and the Sustainable Development Goals implementation, social-driven financing will not be optimal. Africa as a region urgently needs to move from this socially inclined financing to investment financing where returns are environmental, social, economic and financial. This should build on already ongoing initiatives like the innovative financing mechanisms across the continent like the risk-sharing facilities coming up across the continent.

UN Environment

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Environment

Electric mobility could boost green jobs as part of the COVID-19 recovery in Latin America

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The transition to electric mobility could help Latin America and Caribbean countries to reduce emissions and fulfill their commitments under the Paris Agreement on climate change, while generating green jobs as part of their recovery plans from the COVID-19 crisis, according to a new study.

The United Nations Environment Programme (UNEP) report, “Electric Mobility 2019: Status and Opportunities for Regional Collaboration in Latin America and the Caribbean,” analyzes the latest developments in 20 countries in the region and highlights the growing leadership of cities, companies, and civil associations in promoting new e-mobility technologies.

Though still a recent development, electrification of the public transport sector is happening at high speed in several countries in the region, says the study financed by the European Commission through the EUROCLIMA + Programme and the Spanish Agency for International Development Cooperation (AECID) and renewable energy company Acciona.

Chile stands outs with the largest fleet of electric buses in the region, with more than 400 units, while Colombia is expected to incorporate almost 500 electric buses in Bogotá, its capital. Other Colombian cities, like Cali and Medellín, have join Ecuador’s Guayaquil and Brazil’s Sao Paulo in introducing electric buses.

Increased efficiency, lower operation and maintenance costs of electric buses, as well as growing public concern around the impacts of road transport-related emissions on human health and the environment are the main drivers behind this transition in public transport, according to the study.

The transport sector is responsible for 15 per cent of greenhouse gas emissions in Latin America and the Caribbean and is one of the main drivers of poor air quality in cities, which causes more than 300,000 premature deaths a year in the Americas, according to the World Health Organization.

“In recent months we have seen a reduction of air pollution in cities in the region due to lockdowns to prevent the spread of COVID-19. But these improvements are only temporary. We must undertake a structural change so that our transportation systems contribute to the sustainability of our cities,” says Leo Heileman, UNEP Regional Director in Latin America and the Caribbean.

The report calls on decision-makers to prioritize the electrification of public transport, especially when updating the old bus fleets that run through the large cities in the region. There is fear of a “technology lock-in” over the next 7 to 15 years if authorities choose to renew old fleets with new internal combustion vehicles that will continue to pollute the air and cause severe health damages.

Some countries are already paving the way to ensure a transition to sustainable transport. Chile, Colombia, Costa Rica, and Panamá have designed national strategies on electric mobility, while Argentina, Dominican Republic, México, Paraguay are finalizing their own plans, according to the report.

More than 6,000 new light-duty electric vehicles (EVs) were registered in Latin America and the Caribbean, between January 2016 and September 2019, according to the report. The need for charging infrastructure has boosted new ventures and services. For example, e-corridors, already running in Brazil, Chile, México, and Uruguay, allow users to extend the autonomy of their EVs by making use of public fast charging point networks.   

Shared mobility businesses focusing on electric bicycles and skateboards are also being developed in at least nine countries in the region.

The development of electric vehicle charging infrastructure has the potential to foster new investments and jobs, which are key to COVID-19 recovery efforts in the region. 

The report calls on governments to develop a clear medium- and long-term roadmap that provides legal certainty for private investment and highlights the role of sustainable mobility in power grid expansion plans, in line with climate commitments under the Paris Agreement.

The 2015 Agreement, signed to date by nearly 200 countries, aims to keep the global temperature rise well below 2 degrees Celsius above pre-industrial levels by the end of the century and to pursue efforts to limit the temperature increase even further to 1.5 degrees Celsius.

The report was produced with inputs from the Latin American Association for Sustainable Mobility (ALAMOS) and contributions from the Center for Urban Sustainability in Costa Rica.

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Report: More protection for our seas and oceans is needed

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The Commission adopted today a report on the Marine Strategy Framework Directive (MSFD) which reveals that, while the EU’s framework for marine environmental protection is one of the most comprehensive and ambitious worldwide, persistent challenges remain, such as excess nutrients, underwater noise, plastic litter, and other types of pollution as well as unsustainable fishing. This message is further reinforced in the European Environment Agency’s “Marine Messages II” also published today.

Virginijus Sinkevičius, Commissioner in charge of the Environment, Fisheries and Oceans, said “This report and the accompanying EEA Marine Messages confirm that we need to step up action to protect our seas and oceans. We have made progress, for example in the field of sustainable fisheries, but we need additional efforts and stop the irresponsible pollution of our seas. I note with regret that EU Member States will not achieve the Good Environmental Status they were legally required to achieve across all their marine waters by 2020 and that, for some marine regions, efforts required are substantial. The Commission will launch a review of the Marine Strategy Framework Directive, to see what has worked and what has no’t, and act upon the shortcomings identified. Protecting our seas and oceans is an integral part of the European Green Deal, and it is the precondition for our fishermen and fisherwomen to provide us with healthy and sustainable seafood also in the future and therefore deserves our continued attention across policy areas”.

Hans Bruyninckx, Executive Director of the European Environment Agency, said “Our seas and marine ecosystems are suffering as a result of years of severe over-exploitation and neglect. We may soon reach a point of no return, but, as our report confirms, we still have a chance to restore our marine ecosystems if we act decisively and coherently and strike a sustainable balance between the way we use of seas and our impact on the marine environment. In this context, the new EU Biodiversity Strategy to 2030 and other elements of the European Green Deal bring must guide urgent and coherent action for protection and restoration to be underway.”

The MSFD report paints a mixed picture of the state of Europe’s seas. Almost half of Europe’s coastal waters are subject to intense eutrophication. Although EU rules regulating chemicals have led to a reduction in contaminants, there has been an increased accumulation of plastics and plastic chemical residues in most of the marine species. Thanks to the EU’s common fisheries policy, nearly all landings in the North-East Atlantic come from healthy stocks. This is however not yet the case in the Mediterranean, for which more efforts are needed.  

The EEA’s Marine Messages II report, which feeds into the Commission’s review, shows that historic and, in some cases, current use of our seas is taking its toll resulting in changes in the composition of marine species and habitats to changes in the seas’ overall physical and chemical make-up. It suggests solutions that can help the EU achieve its goal of clean, healthy and productive seas, mainly through ecosystem-based management. It also adds that there are signs of marine ecosystem recovery in some areas as a result of significant, often decade-long, efforts to reduce certain impacts like those caused by contaminants, eutrophication, and overfishing.

Background

The Marine Strategy Framework Directive (MSFD) has provided a push towards a better understanding of the pressures and impacts of human activities on the sea, and their implications for marine biodiversity, their habitats, and the ecosystems they sustain. The knowledge gained from implementing this Directive was, for example, a driving force leading to the adoption of the Single Use Plastics Directive. It has led to increased cooperation among littoral Member States of the four European sea regions, as well as across marine regions. As a result non-EU Member States also aim to achieve good environmental status or its equivalent.

The Directive requires that Member States set up regionally-coordinated strategies in order to achieve clean, healthy and productive seas. This overarching goal, referred to as “Good Environmental Status”, is determined over a number of so-called ‘descriptors’ (e.g. biodiversity, fisheries, eutrophication, contaminants, litter, underwater noise). It is a key piece of legislation that protects and preserves marine biodiversity and its habitats, it is therefore an important tool to implement the 2030 Biodiversity and Farm to Fork Strategies and a major contributor to achieving the Zero-Pollution ambition at sea. It is also closely linked to the upcoming Strategies for Sustainable Chemicals and Smart and Sustainable Transport.

The MSFD must be reviewed by mid-2023 and where necessary, amendments will be proposed. The review will further analyse the achievements and challenges to environmental protection of European Seas in accordance with the Commission’s better regulation agenda and will be carried out in parallel with a review of the Common Fisheries Policy.

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Sadeem International Wins Innovate4Climate Top Prize for 2020

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Today during a live virtual contest Innovate4Climate, the World Bank Group’s flagship event on climate change, announced Sadeem International as the winner of its second Pitch Hub Competition. Sadeem – focusing on early warning solutions for flash floods in urban environments – beat out over 400 applications from around the world.

This year’s challenge focused on climate-smart cities, with innovations required to be at Minimal Viable Product stage, to help cities become low-carbon and/or climate-resilient across a range of sectors: energy, food/agriculture, mobility/transportation, waste/water, fintech. Solutions had to demonstrate potential for climate change mitigation or adaptation, and that they were feasible, with a clear value proposition, implementable and scalable.

The winning startup and four other finalists were chosen after evaluation by 40 expert reviewers and multiple rounds to assess its viability.

“Participating in this competition was a really enriching experience; the level of exposure and networking potential is unique. It is also really refreshing to see that every day there are more and more startups aligning business with climate innovations. We are so happy as a team for getting this prize!”, said Esteban Sanchez Canepa, Co-Founder and CTO at Sadeem International. “We have a commitment to keep addressing the urban and climate challenges of our generation”.

The winning startup will receive Amazon Web Services credits worth $30,000, with the runner up and third finalist receiving $20,000 and $10,000 respectively. The top three winners will receive invitations to major industry events and training opportunities. All 5 finalists will be part of Innovate4Climate’s Startup Incubation Bootcamp Program, designed and facilitated by partner, The Venture City, and will be invited by Innovate4Climate to meet with potential investors and venture capital firms and will have access to Innovate4Climate’s 2021 event. Sadeem also won the audience choice category.

“It is really inspiring to see climate-smart innovations and new approaches to addressing climate change for urban communities”, said Bernice van Bronkhorst, Global Director, Climate Change, World Bank. “The kinds of inventive solutions we’ve seen today from this group of entrepreneurs are a great opportunity not only for communities tackling climate change but also for creative entrepreneurs delivering solutions that can work, and the World Bank’s Innovate4Climate team is pleased to support their efforts.”

This year’s competition was held virtually with finalists submitting recorded pitches that were reviewed by the judging panel, followed by a virtual Q&A between judges and competitors. The judging panel comprised Riyong Kim (EIT Climate-KIC), Dr. Tara Shirvani (EBRD), Assaf Wahrhaft (UpWest), Martin Wainstein (Yale OpenLab), Vikram Widge (Climate Policy Initiative).

“All the finalists this year offered innovative solutions to address climate change, with several harnessing state-of-the-art technologies. It was a difficult decision, but it seems appropriate that the winner was the one that can help cities become more pro-actively resilient”, said Vikram Widge, Senior Advisor, Climate Finance, Climate Policy Initiative, part of the judging panel.

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