Porter Novelli

The Paris Finance Map, Part 2: The Influencers

07/10/2017

This post has been edited since it was first published on 20 May.

In Part 1, we looked at the roles of government and finance actors on the Paris stage (see box).  In this post, we turn to actors that don’t have official roles or money to invest, but can nevertheless have significant influence on those who do.

We repeat our alert last time:  this overview is not, and is not intended to be, an exhaustive survey. Rather, we are trying to identify a typology of the parties, with a few examples of each to illustrate how they work and interact.

Policy and finance actors surveyed in Part 1
  • Governments (national, regional, local and cities)
  • Official bodies such as the UNFCCC, OECD
  • Development finance institutions (both multilateral and bilateral)
  • Green banks
  • Climate Funds
  • International capital markets
  • Domestic capital markets
  • Corporations
  • Rating agencies/opinion providers
  • Insurance
  • Aid agencies
  • Foundations / philanthropy
Influencers surveyed in this Part 2
  • ‘Programatic Conveners’ such as CDP, Climate Group and ‘Aiming for A’
  • ‘Trade’ networks such as IETA, IRENA
  • Business networks such as the Climate Group, We Mean Business
  • Investor networks such as IIGCC, CERES, and 2Degrees
  • City networks such as C40, The Mayors’ Covenant
  • NDC specific networks such as NDC Partnership, CDKN
  • Think tanks such as Carbon Tracker, CPI, WRI, IIED and the New Climate Economy
  • Consultancies
  • Advocacy groups such as Mission2020, Greenpeace, ClientEarth and Oxfam
  • Media
  • Academia

Part 2 has been more challenging to do, because it is difficult to put many of the influencers for climate action in one category only.  For example, some such as CDP sit within the business category and also require their members to walk the talk in concrete annual disclosure actions.  To avoid repetition, we describe the organisation only once, in their main category.

Another way to look at these Influencers is to assess where they sit on the Inside-Outside spectrum.  Are they on the inside of their community working to make change from within, or are they on the outside, lobbying that community to transform?  The push-me-pull-you between these players and the actors described in Part 1 drives the change, so if Paris calls for greater ambition, what needs to give?

Please let us know if you agree with the categorisations or not.  We’re keen to build out the list of organisations world over so please also let us know of others we should know about.

“Programmatic Conveners”

Like foundations, programmatic conveners (for want of a better term)  are systematically mobilising action and behaviour change among the groups they target.  These organisations differ from think tanks because they seek change not just by producing evidence or ideas, they also require members or supporters to take specific actions and then report their progress on them.  One of the longest serving is CDP (originally the Carbon Disclosure Project) which, over a fifteen year period, has brought on board 5,600 corporations and over 500 cities.  These entities use CDP’s platform to measure and disclose their environmental performance, leading to behaviour change in carbon use that has obvious pluses for mitigation.  CDP’s focus on supply chains is perhaps equally important for adaptation, since the raw materials / primary processing end of these chains is often found in rural areas and the hinterlands of cities.  Creating more sustainable supply chains is a bull’s eye for spreading the benefits of more responsible sourcing and manufacturing behaviour into these harder-to-reach areas.

Established in 2004 the Climate Group works with the world’s biggest businesses, cities, states and regions to drive ambitious reductions in carbon emissions.  They run Climate Week in New York every September and have spawned the Under2 Clean Energy Forum, RE100 and many other initiatives where organisations have to commit to carbon reductions. Most recently with others, they formed the We Mean Business coalition.  This encourages corporations to commit to a range of climate-friendly initiatives and report their progress in achieving them.

Convening in the investment field is the PRI – formerly the UN PRI but now independent of the UN.  PRI convenes 6 principles of responsible investment, which members sign up to and then report progress on.  Until recently, PRI’s signatories were mainly to be found in Europe and North America, but the organisation now has 9 regional signatory networks and is seeing a significant uptick in signatory recruitment in important markets such as Asia Pacific.  As we recently reported, PRI has recently been contributing to the G20 and other parties work on green bonds.  See also the Advocacy section below, for a description of shareholder action organisations.

‘Trade’ Networks

Also focused on corporate actions are a number of ‘trade’ networks or associations, covering specialist fields such as carbon markets and renewable energy finance. The purposes of such networks, apart from providing a platform for communication between parties with similar interests, are usually advocacy for policy change and the development of standards.  One example in a field which could be critical for NDC funding is the International Emissions Trading Association (IETA), which works towards both of these objectives in the field of carbon trading, including efforts to promote innovation in trading instruments and technologies through initiatives such as Innovate4Climate. We would also place the Climate Bonds Initiative in this bucket.  They have been very successful in kickstarting the green bonds market, and play a central role in standard setting, working with both issuers and investors.

Business Networks

Businesses have been visibly engaged on climate and green issues since the early nineties, and some notable examples well before then, many through their non-climate specialist trade associations.  As readers will know, not all business networks are climate friendly which is why the following networks are such a vital voice in the business community – globally, regionally, nationally and locally.  In addition to CDP, The Climate Group and We Mean Business mentioned above, we include WBCSD, The UN Global Compact, The B Team, Prince of Wales Corporate Leaders Group, BSR and the Carbon War Room (now part of RMI).  All are working with business to lift engagement on climate issues, contribute to corporate strategic thinking and/or promoting corporate accountability and transparency.  Some have a wider ESG remit, not just climate.  In addition to these specialist groups, general trade associations are taking first steps, for example, setting up committees to consider climate risks and opportunities.  This is happening across the world.

Investor Networks

A type of ‘investment trade association’, the number of investor networks focussed on green or climate finance has grown over recent years.  Emerging from the socially responsible investment movement that began to gather pace in the 1990s, with its own global network of organisations, the Institutional Investor Group on Climate Change (IIGCC) and its regional partners seek to co-ordinate the activity of their members around advocacy and policy change goals.  IIGCC was one of a number of investor groups representing $15 trillion in assets that recently issued a letter to the Trump administration and has provided a briefing paper for the forthcoming G7/G20 meetings with three goals on Paris and wider low-carbon finance.

As with PRI, to date, membership of such investor groups have been largely concentrated in the US and Europe, but this is now starting to change with the emergence of groups like the Asia Investor Group on Climate Change (AIGCC).  The Global Investor Coalition brings together four networks – IIGCC (Europe), Ceres (North America), IGCC(Australia/NZ) and AIGCC (Asia).  We recently covered the IGCC’s work on adaptation in Australia , aimed at promoting investor awareness of challenges and opportunities in this area.  Also of note is the work of 2Degrees a multi-stakeholder initiative to help financial institutions align with 2CDegree goals.

We differentiate these organisations from ‘conveners’ in the sense that while they mobilise their members to take certain actions, there is no requirement for them to report back on progress in a systematic way.

City Networks

The world’s cities occupy just 3% of the Earth’s land, but account for 60-80 percent of energy consumption and 75 percent of energy-related carbon emissions. With 60 percent of the world’s population forecast to be living in urban areas by 2030, and 95 percent of urban expansion in the next decades expected to take place in developing world, it is clear that cities are both a big part of the problem and a big part of the potential solution to climate change effects.

No surprise, then that cities and mayors have become very active networkers, with groupings springing up at all levels from global to regional to national.  Probably the largest, C40, which now counts over 90 conurbations worldwide, has taken a wise decision not to update its name to keep up with its membership.

As we recently found, however, there is a paradox with cities, which is their relative lack of fund-raising powers.  Most cities are limited in terms of what they control and can raise revenue from, and most are similarly constrained in what they can borrow.

NDC Specific Networks

There is only one network that we know of currently focussed exclusively on the NDCs, the eponymous NDC Partnership . This is a ‘club’ for national governments and international institutions committed to what the Partnership calls “ambitious NDC and related SDG implementation”. Non-state actors including NGOs, DFIs and others can become associate members.  There are currently 58 country and 8 institutional partners. Funding is provided by the governments of Holland, Germany, France, Denmark and the UK and the Partnership secretariat is housed by the WRI.

As the Partnership itself says, its role is as a ‘dot-connector’ between parties seeking to accelerate NDC implementation, but it does house two ‘navigator’ databases, one for NDC-related funds and initiatives (529 of them, apparently) and the other for tools, guidance, and advisory support (261 entries). Among these is the NDC Explorer database, providing summaries of all the NDCs, which we featured when it was launched.  How the Partnership’s work will evolve is yet to be seen.

The Climate and Development Knowledge Network was instrumental in assisting a number of countries in developing their INDCs, and presently houses the Quick Start Guide to NDC Implementation, as well as the LEDS GP initiative, described below.

Watch this space for news of a ‘Climate Finance Accelerator’ that should be announced soon and is designed to directly link countries with commercial and concessional sources of finance.

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Think Tanks

A number of think tanks have been important contributors to climate progress over the years, and many are now focussing specifically on Paris implementation.  We highlight some of the leaders in this area.

If you work at a national or regional think tank, let us know what you are doing on Paris!

The Climate Policy Initiative has majored on climate finance, publishing a regular ‘Landscape’ report on what funding is coming from where, though the future of this is not presently clear.  As we have reported, it also houses the Global Innovation Lab for Climate Finance, which seeks to promote innovative financing structures and link these to funding sources, with growing success.  Another innovation hub (though currently very much Europe- and cleantech-focussed) is provided by Climate-KIC based in Germany.

When history looks back at this time, commentators may consider CarbonTracker to have had the most powerful influence on energy market sentiment.  The organisation was the original proponent of the “carbon bubble and stranded assets” thesis that drives much of the pressure for asset reallocation and fossil fuel divestment[1].  Set up by city analysts, Carbon Tracker continues to produce transition-related analysis.

In the Paris context, the International Institute for Environment and Development focusses on the challenges faced by developing countries in accessing support and finance under the agreement, and recently published a report on how DFIs are failing to channel money locally enough.

ODI has a Climate and Energy team that undertakes research and advocacy, as well as providing management and human resources for CDKN and the LEDS Global Partnership, formed in 2011 to help developing countries formulate and implement low emission development strategies. ODI also runs the Climate Funds Update. It is developing a workstream on the deployment of new technologies such as smart grids and tech-enabled urban design, to encourage progressive decision-making.

The World Resources Institute has a pedigree in climate monitoring going back to the 1990s, when it developed the Greenhouse Gas Protocol (the world standard for corporate greenhouse gas accounting) with input from UK investors.  As well as its regular reports on climate- and resource-related issues, WRI provides the secretariat for the NDC Partnership.

There are a number of think-tanks that specialise in the economics of climate change and transition to low carbon development, such as TERI, New Climate Economy and E3G.

Consultancies

Most of the large consultancy firms have specialist units or even whole divisions focussed on climate issues, which in many cases have grown out of their earlier ‘environment’ practices.  They all recognise the commercial opportunities presented by the implementation of Paris.  Among other tasks, they provide support to governments and have had and are having a significant influence for example, on INDC and NDC preparation, policy advice and capacity building.  In addition to these groups, specialist consultancies focused on the transition such as Systemiq have recently emerged.  For more information about the world of green and climate consultancy, the ENDS Directory is a valuable resource.

Advocacy Groups

Mission 2020 is the newest addition to this category and was recently launched by the UNFCCC’s former head Christiana Figueres who seeks to focus action on peaking emissions by 2020 with 6 ‘milestones’ to be achieved by then if Paris and SDG goals are to be met.

More generally we see NDC finance related campaigns falling into three groups:  those focussed on ‘sector’ issues, those engaged in divestment from fossil fuels and ESG shareholder action more broadly; and last but not least, climate justice.  These NGOs are working at every level from the most local to the global.

In the first category are NGOs working on themes such as energy, forests, oceans, water, agriculture, human and animal rights and so on. As well as their advocacy work which usually covers mitigation and adaptation, these organisations are often at the forefront of new thinking on finance in their fields.  To take just one example, rainforest organisations have been involved in developing fairtrade structures, certification schemes and carbon trading programmes.

In the second are organisations urging divestment from fossil fuels such as Divest/Invest and ShareAction. Other advocates such as ‘Aiming for A’ are making fossil fuel companies more accountable for their carbon impacts.  Shareholder action and divestment volumes are growing, helped by groups such as PIRC and IRRC.  The US-based As You Sow reports each year on the motions put to the Annual Meetings of major companies and notes that in 2017, “Shareholders have filed far more resolutions … concerned solely with environmental and social issues at U.S. companies than at this point last year — a total of 430, up from 370 in 2016.”  A different approach comes from InfluenceMap, which tracks the lobbying efforts of major companies in climate change and other areas.

Finally, a number of major global charities are focussed on issues of climate justice especially access to finance and most especially finance for adaptation.  These include organisations such as Oxfam and the three publishers of a recent paper on the Global Goal on Adaptation:  Action Aid, Care and WWF.  Read our interview with Harjeet Singh of Action Aid here.

The development organisations, of which there are many, associated with the world’s major religions are also strong advocates for climate justice.  To name but four – Islamic Relief, Christian Aid, CAFOD and Bhumi Project – all are active in helping the world’s poorest communities in practical ways to help themselves, with a strong focus on building resilience.  All are vocal on the need for climate action, with graphic examples of these communities often bearing the full brunt of today’s climate impacts – drought, flooding, seasonal changes – when they are least responsible for the problem.

Media

Mainstream news media have shown little sustained interest in climate or green finance.  At the benign end of the scale, in major networks like the BBC, the whole movement in corporate culture towards embedding climate awareness in all activities seems to have gone unnoticed, with climate still the preserve of an ‘environment correspondent’ and almost never mentioned by, say, business or economic correspondents.

At the actively negative end of the scale, a number of very large media outlets such as the UK’s Daily Mail and Fox News in the USA have developed a dumbing down ‘climate infotainment’ approach to the topic leaving their readers unmotivated to do anything and often confused.

On the internet, however, quite a healthy ecosystem of blog type services is emerging, of which NDCi.global is we hope seen as one. Other titles are Environmental Finance, a daily subscription service on transactions and policy which has covered the emergence of green bonds especially well.  Eco-business, a digest based in Singapore, focusses on the interface suggested by its title, with an Asia Pacific slant[2].  US-based Morning Climate, funded by the Macarthur Foundation, is another digest covering climate politics as well as finance.  Daily Climate has more of a news / investigative approach.  The longer term business models for these titles, mostly to date subsidised to some degree, will need to be resolved, but at present, there seems to be a reasonable flow of information for the minority seeking it out, if not the general public. All titles, including our own, tend to have their strongest connections in developed markets and struggle to give the emerging world the coverage it deserves.

Business media / data services are led by Bloomberg, especially Bloomberg New Energy Finance. We have covered its free climate finance tool Climatescope in the past, and for finance industry subscribers it offers a specialist set of screens.  Responsible Investor is also a regular commentator on climate finance.

Academia

Like the think tanks, academia has long been a part of the climate discourse, but less so part of the climate finance one.  We have covered the contributions of Notre Dame University (USA) in adaptation and of James Cook University on the same topic .  In the UK, the Imperial College Business School has recently launched a specialist Centre for Climate Finance and Investment.  At Oxford University, the Smith School of Enterprise and the Environment has it’s Sustainable Finance Programme.  The London School of Economics Grantham Institute has been publishing climate finance research for some years, and maintains a major public database of climate change related laws globally, in association with the Sabin Center for Climate Change Law at Columbia University.

Let us know what your institution is doing in the field of climate or green finance

[1] Disclosure:  NDCi.global is funded via a body linked to CarbonTracker called Investor Watch

[2] Disclosure:  NDCi.global has non-monetary resource-sharing arrangements with these two titles

 

One thought on “The Paris Finance Map, Part 2: The Influencers

  1. Масштабного и качественного рынка экономики, не может быть без : Сельское хозяйство – Зерно Хлеб, Нефть, Газ, Уголь, Электростанций, Тяжелая промышленность. Для этого необходимо создание масштабной рабочей системы. Нужна инновационная программа, которая выведет основное производство, на передовой и безопасный уровень развития. При этом тяжелая промышленность должна быть вне конкуренции и вместе с этим добиться максимальной экологической безопасности энергоносителя, не теряя основной продукт и максимальное качество предприятия.

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