Between 6 and 18 November 2022, climate leaders gathered in Egypt for the 27th Conference of the Parties to the United Nations Framework Convention on Climate Change. This year's focus was on progressing the commitments made at COP26, including delivering the finance for climate action in developing countries.
A delegation of senior Macquarie leaders, led by Managing Director and Chief Executive Officer Shemara Wikramanayake, joined events and took part in sessions during the conference. On this page we bring you some of the highlights from on the ground.
Negotiations drew to a close and COP27 concluded having delivered meaningful progress on several key issues. There remains, however, a significant gap between the climate targets submitted by countries in their nationally determined contributions and the reductions needed to meet the goals of the Paris Agreement.
In a historic agreement, 200 countries agreed to set up a new ‘loss and damage’ fund to support the least developed nations meet the costs of damage caused by the adverse effects of climate change and which cannot be avoided or mitigated through adaptation. The final agreement establishes a transitional committee to examine and make recommendations on the fund's financing for consideration at COP28 next year, to be held in the United Arab Emirates.
The final agreement also included a clear call for the reform of multilateral development banks (MDBs) and international financial institutions (IFIs), such as the World Bank and the International Monetary Fund. It urges them to make climate action one of their overarching priorities and to make more effective use of different blended finance tools and public-private partnerships to achieve progress.
The Just Energy Transition Partnerships (JETP) public-private partnership model, first deployed to support South Africa at COP26 and now Indonesia at COP27, was also highlighted as a major step forward for global climate action. Macquarie is part of the private sector finance institutions supporting the JETP in Indonesia.
On Finance Day at COP27, the focus was firmly on the need for partnership across the finance community and country-focused climate finance solutions. Across all discussions, the need for strong trusted relationships between the public and private sectors was paramount, alongside the important role of multilateral development banks in accelerating the energy transition in emerging markets and developing countries.
The day started with a focus on the Climate Finance Leadership Initiative, of which Macquarie is a founding partner. The CFLI is focused on country level solutions and Macquarie co-chairs CFLI India alongside Natarajan Chandrasekaran from Tata Sons. CFLI country pilots bring together leading local and international private companies to collaborate on catalytic financing and policy concepts that can help accelerate progress on priority transition issues identified in each country. At a roundtable event, Shemara Wikramanayake spoke about progress in India and Juan Carlos Mora Uribe, CEO of Bancolombia, shared his perspective on replicating the CFLI India model in Colombia (CFLI Colombia – the first Latin American CFLI Country Pilot was announced earlier this year), which Macquarie is supporting.
Partnership across industry and with government was the theme at the Global Wind Energy Council pavilion, where Green Investment Group portfolio company Corio Generation’s CEO, Jonathan Cole, was speaking on a panel about how the public and private sector can finance the transition from coal to renewables, and the opportunities to do so in Asia (watch the replay).
Strengthening the relationships between private capital and public finance was in focus at the UN’s Green Climate Fund (GCF) Pavilion where Mark Dooley joined Soji Omisore, Deputy Director of Private Sector Facility at the GCF, for a discussion on the role of co-investment platforms to accelerate climate finance mobilisation. Mark had the opportunity to discuss the collaboration between the GCF and Macquarie on a financing platform aiming to accelerate the uptake of e-mobility solutions in commercial fleets and public transportation in India.
Kristina Kloberdanz, Macquarie Asset Management’s Chief Sustainability Officer, joined a number of panels, including a Sustainable Markets Initiative (SMI) roundtable on Blended Finance and Scaling Natural Capital Investments, a discussion on the work of the Taskforce on Nature related Financial Disclosure pilot in Africa, and one where Kristina spoke on the decarbonisation journey and levers to advance progress.
The Macquarie team also spent time at the busy Australia Pavilion speaking to the Ambassador to Egypt and government officials, joining the government’s active program of COP27 activity.
Finance Day culminated in a panel hosted by Mark Carney, co-chair of the Glasgow Financial Alliance of Net Zero, a group of 550 financial institutions committed to reach net zero by 2050 or sooner. GFANZ was created as the first cross-financial sector climate initiative in the run up to COP26 and has been growing its membership ever since. Shemara is the co-lead of the GFANZ workstream on climate finance mobilisation for emerging markets and developing countries, and provided an update on progress achieved since Glasgow, notably in support of country-focused initiatives like CFLI and the Just Energy Transition Partnerships.
After three days and over 40 separate engagements, the Macquarie delegation wrapped up its main program of activity at COP27 and will follow the progress of the governmental discussions with interest over the coming days.
Day two began in Sharm El-Sheikh with a roundtable of leaders from financial institutions and multilateral development banks. The meeting was convened as part of Shemara Wikramanayake’s role as co-lead of the Glasgow Financial Alliance for Net Zero (GFANZ) workstream on mobilising capital for emerging markets and developing countries. You can read more on the work of GFANZ in this area in the recently published progress report, ‘Actions to Mobilize Capital to Emerging Markets and Developing Economies’.
Building on the theme of the transition of emerging markets, Mark Dooley, Global Head of Macquarie Asset Management’s Green Investment Group (GIG), took part in a discussion on the role of concessional finance in scaling up climate investment, the barriers to public-private partnerships, and how we can best replicate examples of successful cooperation. Hosted by the Asian Infrastructure Investment Bank (AIIB), it featured Liqun Jin, President and Chair of the Board of Directors, AIIB; Dr. Rajiv J. Shah, President, The Rockefeller Foundation; Anne Valentine Andrews, Global Head of Infrastructure and Real Estate, BlackRock; and was chaired by Sir Danny Alexander, Vice President, Policy and Strategy, AIIB. You can watch a replay of the discussion on the AIIB’s YouTube channel.
Shemara then took part in a panel discussion on the importance of accessible, reliable and comparable climate data in driving the delivery of the Paris Agreement by helping to identify emission baselines for businesses, develop and set targets, and monitor progress. The event featured Mike Bloomberg, who updated on progress in establishing a Net Zero Public Data Utility, and Simon Stiell, Executive Secretary of the UNFCCC, among others.
The day was also marked by significant progress in establishing the FASTInfra Sustainable Infrastructure Label (FISI Label) – a new label for sustainable infrastructure announced at COP26 in Glasgow. The FISI Label is a consistent, globally applicable labelling system designed to identify and evaluate sustainable infrastructure projects, with the overarching objective of establishing sustainable infrastructure as a deep and liquid asset class.
Macquarie Asset Management's Green Investment Group has worked closely with HSBC, the Global Infrastructure Facility (GIF) and others to advance the label, and today announced that Bloomberg L.P. and the Global Infrastructure Basel Foundation (GIB) had been chosen to serve respectively as the Data Repository and Secretariat of the Label, following a thorough and competitive selection process.
The progress was marked with a launch event featuring Shemara and a panel discussion at the France Pavilion, where Mark Dooley spoke about our plans to trial the label.
By providing a simple, practical framework to communicate sustainability credentials, FAST Infra’s SI label should provide clarity to investors and developers, helping guide capital allocations towards the sector. It’s a superb example of cross-sector collaboration and we look forward to working with Bloomberg and GIB, two highly respected thought leaders at the forefront of the energy transition, to make it a global success.”
Mark Dooley, Global Head of Macquarie’s Green Investment Group
Shemara then took part in a panel discussion focused on delivering on climate commitments convened by the UN High-Level Champions and featuring COP27 President Sameh Shoukry and COP27 High-Level Champion Mahmoud Mohieldin. Shemara spoke about the work underway to mobilise capital for emerging markets and developing countries, including Macquarie’s work on e-mobility in India. You can watch a replay of that discussion.
The day concluded with a GFANZ hosted roundtable on Financial Institution Net Zero Plans where Macquarie joined other financial institutions and regulators to discuss the implementation of net zero commitments and GFANZ’s recent publication of its Financial Institution Net-zero Transition Plans report.
COP27 in Sharm El-Sheikh kicked off with the World Leaders Summit and keynote speeches from the UN General Secretary and a series of political leaders, including Egypt’s President Abdel-Fattah El-Sisi, UK Prime Minister Rishi Sunak and French President Emmanuel Macron. In an early signal of the likely emphasis of COP27, leaders from emerging markets and developing countries made powerful speeches on the devastating effects of severe weather on their nations and the need for the implementation of promises of support from developed countries.
Macquarie’s COP27 engagements started a few days earlier in London with Mark Dooley, Global Head of Macquarie Asset Management’s Green Investment Group (GIG), attending events in London to mark the closing of the UK’s Presidency of COP26, including a meeting with His Majesty King Charles III.
Back in Egypt, on the fringes of COP27, King Charles III’s Sustainable Markets Initiative (SMI) held the Terra Carta Action Forum. The Forum brings together leaders from the public and private sector and showcases the work of the SMI Industry Task Forces and Alliances, in which Macquarie is an active participant.
At the Forum, Macquarie took part in a series of discussions focused on accelerating the energy transition, culminating in a panel discussion with Macquarie Group Managing Director and CEO Shemara Wikramanayake, bp CEO Bernard Looney and Lloyd’s CEO John Neal, hosted by Bank of America’s Brian Moynihan and moderated by Bloomberg News’ Francine Lacqua. The discussion focused on the importance of the relationship between financial institutions and energy companies in accelerating the transition by supporting the efforts of high carbon companies to deliver a managed decarbonisation transition, alongside a simultaneous rapid scaling of investment in climate solutions, like renewables, EVs and hydrogen.
The event coincided with a significant announcement by GIG, which launched a new global battery storage platform, Eku Energy. Scaling grid storage capacity is critical to the decarbonisation of the power sector and Eku Energy will have a portfolio of digitally enabled, utility-scale storage projects in construction and operation in key markets around the world.
The Macquarie delegation also began a program of client and government partner bi-lateral meetings, which included a meeting with the Scottish First Minister at the Scotland Pavilion in the COP27 Blue Zone.
Mark Dooley also met with Vietnam’s Minister of Natural Resources and Environment, Mr Tran Hong Ha, at an event organised by the Global Wind Energy Council. Learn more about how GIG portfolio company, Corio Generation, is working in partnership with Vietnam’s FECON to develop a 500 MW offshore windfarm in Ba Ria, Vung Tau province.