The People United Will Never Be Defeated
“El pueblo unido jamas sera vencido”
These words were constantly ringing as a unifying call by civil society at COP27 during the “People’s Plenary.”
Indeed, despite the intricacies of COP, international climate policy and everything else, those words will ring in my head forever like liberty itself. To understand COP, is to understand that there are clear complexities that cannot be overcome. Firstly, there is the understanding what COP even stands for (Conference of Parties), then there is getting to COP (a huge and novel task to be officially accredited by the UN), and then once arriving there is the challenge of navigating through the conference, understanding how negotiations work, and just generally understanding honestly what is even going on. At any given moment, there are hundreds of panels, negotiations, side events, protests, etc.
For my focus as part of the delegation, I aimed to understand the intersection of business, justice and sustainability. Specifically, I came with the question – what role does business play in providing just solutions towards a more sustainable future? Often, business and justice can feel on very juxtaposing, but in the current world we live in, business is not going anywhere. The path forward towards solving the climate crisis must include both the public and private sector.
Acknowledgement of Privilege
Before I jump in, I want to acknowledge how truly fortunate I have been to even be in attendance this COP. On one of the days, I attended a youth networking event hosted by a couple of non-profits and one of the youth leaders aptly pointed out that our representation at COP is not just a reflection of us being there to represent our various causes; but also, a reflection of the voices not represented in the room that could not there for any number of reasons.
As such, I am proud to represent the voices that could not be in the room and take the responsibility of being a delegate very seriously.
How are we defining business in this case?
Business can be a broad and overarching word. However, it is critical to understand than when referring to business, it is not only the big corporations. While in theory almost any organization or institution could be considered a business, when discussing business in the context of COP27, I am referring to any organization, whether small or large, that seeks create and build value through capital creation and growth. This might be referred to as the “private sector”.
What was the role of business at COP27?
The role of business at COP27 was quite quiet, in my opinion. Although there were some panels with private sector representation through booths and some panels, the prevalence of business was not apparent outwardly. Behind the scenes, I imagine there were quite a few lobbyists and corporations trying to push country delegates. However, business has no official seat at the table. What is interesting as the “implementation COP”, business was often discussed as the vehicle of implementation by delegates. In fact, Secretary of State John Kerry spoke of the intricate dance between the government and private sector. Ultimately, in the United States, Congress must green light any money given to environmental initiatives. This monetary value has not really changed over the year; there is something around $50M dollars given to environmental initiatives.
The cover decision of COP27 effectively passed the establishment of a committee of 24 countries to determine the details of the funding facility for Loss and Damage Financing, and will determine how to operationalize it at COP28. But, the broader implication of this relates to the Barbados led initiative because in order to fund the facility, they are looking at needing something in the ballpark of $300B+ (for context: US congress has historically only authorized somewhere around $50M for these kind of initiatives, and this amount hasn’t changed in the past 50 years, [despite the time value of money being quite different over the course of 50 years], I believe). Secretary John Kerry even said at COP27 in some of the briefings I went to that he’s talking with CEO’s about this. Some of the impetus is also because there was a previous pledge to mobilize 100B USD amongst the developed nations (Green Climate Fund) and I think something like ~82B USD was only ever mobilized.
In the COP27 debrief for the private sector on December 16, 2022, the head of delegation for the US, Trigg Talley, spoke of the establishment of the financing facility. There are two proposals: to establish a new fund, or have a broader discussion about funding arrangements (which relates to the potential re-haul of the multilateral banks). Antigua Barbuda really held the G77 together throughout the COP in favor of a new fund, so that the G77 remained united.
Towards the end of the COP, the United States and other parties decided it would probably be most prudent to anticipate an establishment of a fund. In the final days of negotiation during week 2, the EU was the first to move on a proposal. Their proposal issued a fund that would focus on the most vulnerable countries (not the broad range of countries able to be funded under operating entity). Most critical to all the developed countries: there would be no liability to funds that were paid out to countries. The United States delegation indicated that the US contributions to L&D will continue to be through a broad array of institutions & update MBD & debt deferment and relaxing income restrictions for different WB finance (concessional or non-concessional). At the end of the day, this fund will need to be appropriately structured so that it does attract finance.
Enter the private sector.
What should be the role of business at COP27?
I believe that the role of the private sector should be to push government and policy through providing financing, creating business and solutions that are centered on sustainability to push consumer value and dollar and provide capacity building mechanisms.
For example, we are at a critical time as the biggest advocates for the L&D funding facility are countries that serve as strong allies and maintain important geo-political standing points for the United States. As such, business needs to align with the broader policy and initiative to best serve both the needs of the country and the world. There are many implications to this, but ultimately business leaders must be willing to think broader and more holistically.
So, what do we do with this as business leaders?
Reflecting towards COP28, we are at an extremely pivotal moment in international climate policy. The establishment of the committee to explore the Loss and Damage Financing facility puts business leaders is a critical spot. Business can make a stance and declare to the world that yes, the fight for our world and against climate change is important and intrinsically related to social justice. After all, there is no social justice without environmental justice. And no matter who we are, we can use our voice. We, as leaders, can:
- Redefine business school education: We are so often taught in business school that value is solely created through capital and the purpose of a firm is to continue to grow to create value. However, to achieve sustainable outcomes, we need to drive education that is focused on broader implications. This means creating a pipeline of applicants that are beyond the typical applicants interested in business school to continue to drive diversity, both in thought and demographic characteristics, reducing the barrier to entry both to school and to re-entry post graduate school, and de-coupling educational aspects in the curriculum from consumption driven assumptions to thinking about broader impact and potential models. Could we have a business where success is not defined purely by continual growth and profitability? And what would it look like to be a leader of such a business?
- Center business decisions thinking about who is most vulnerable: Although Loss & Damage financing is being discussed at a global scale and in terms of nations, there are plenty of local communities that are constantly impacted by decisions made. There are millions of examples of communities, especially marginalized communities, paying the price for economic development. But perhaps, loss and damage financing should be thought of at a more micro scale. In Michigan alone, there are indigenous communities and historically Black communities, such as Flint, that are suffering from impacts of Climate Change. A significant portion of Texas is expected to be climate refugees due to unbearable heat. We’re already seeing the impacts and business leaders can choose to allocate capital towards innovation and reduction initiatives that protect the provide support for the most vulnerable communities.
- Advocate for policy with a long-term time horizon: It is a tale as old as time…what is the role of government vs. business in climate policy? It could be constantly debated about how much government intervention should exist, but I hope we can all agree that business can push the fold by advocating and lobbying for policies that are broader that short term gains for a business. Long term incentivization can be driven by providing indicators and measurement that align with social and environmental capital and not just economic gain. We need business to think about models and solutions that drive consumer behavior to constantly push policy makers towards sustainable and just solution as equally as consumers can drive change in business. We need business to partner with government, NGO’s and the development sector to appropriately allocate capital towards financing initiatives that drive both sustainable outcomes for people, planet and profit. This starts with creating policy frameworks that provide appropriate incentivization structures for business to invest and for consumers to buy.
Leaving COP27 left me more invigorated than ever that the use of our voice can and does matter. It is easy to feel pessimistic about the prognosis of climate change, and especially driving international consensus amongst policy. But, in fact, a lot of power was driven from small island nations such as Barbados. As countries that are likely going to be hardest hit by the impacts of climate change, they are truly pushing the fold despite the obvious power imbalances between developing and developed nations. Because as pointed out in the People’s Plenary at COP27, the word feared most is solidarity. If we stand together, as civil society, government, and business alike, we will never be defeated.