The upcoming 28th UN climate change conference (Cop28) places a responsibility on the UAE to shape the climate-action narrative required for measurable positive impact in the future.
The conference’s key objectives, which include climate finance, food systems and adaptation, will merit different perspectives from global stakeholders.
For its part, the UAE can bring to the table its experience of being on the frontlines of climate change, adopting innovation-driven mitigation solutions and making efforts to diversify its oil-dependent economy.
However, environmental protection is – and will always be – a shared responsibility of every entity with a vested interest in the planet’s sustainability. While the onus is largely on governments, which are responsible for top-down policymaking, the private sector also has a pivotal role in developing actionable and affordable solutions.
The upcoming Cop28 conference offers a timely opportunity to make meaningful contributions to bigger goals, such as the country’s Net-Zero by 2050 commitment. Corporations must reassess their environmental, social and corporate governance (ESG) risks and incorporate adaptation and mitigation measures into their business models to build operational resilience and agility.
First and foremost, the private sector must acknowledge and accept that it cannot disregard ESG risks. In recent years, climate change has increasingly been manifested through agricultural distress, erratic rainfall and food shortages in the region. Such issues are gradually increasing governmental spending, the cost of which will be distributed to the private sector.
The resulting increase in the cost of capital will exert pressure on value creation. That is to say, the private sector is not immune to the ill effects of climate change. As a result, forward-thinking companies are becoming more receptive to developing and adopting sustainability solutions and aligning with the governmental vision.
The private sector has a pivotal role to play in developing actionable and affordable solutions
Regarding climate policies, mitigation has found greater emphasis, whereas adaptation continues to be on the back burner. This is perhaps why adaptation is high on the agenda of Cop28.
Regionally, the need to emphasise both adaptation and mitigation as part of net-zero goals can be understood by analysing the water infrastructure. The Middle East grapples with acute water scarcity, relying on desalination plants and solutions such as cloud seeding for consumption and agriculture.
Desalination plants are both energy- and carbon-intensive, however, and are counterproductive to mitigation efforts. Yet without such sources, agricultural yield takes a hit, leading to food shortages.
Likewise, cloud seeding and unusual rainfall patterns linked to climate change often cause flash floods, wreaking havoc on public infrastructure due to a lack of adaptation measures such as effective stormwater drainage systems.
There is, therefore, a need for multi-stakeholder adaptation and mitigation efforts and the implementation of interdisciplinary solutions such as ‘sponge cities’.
As the name suggests, sponge cities absorb and drain stormwater through a combination of green-scapes (green areas), blue-scapes (water bodies) and permeable urban surfaces. Through effective filtration and underground reservoirs, freshwater can be harvested and utilised to enhance water security.
In this way, sponge cities effectively address climate change-linked effects like flooding (adaptation) and concurrently reduce the need for carbon-intensive desalination plants (mitigation). There is a compelling case for their adoption, but the question of how to encourage companies to support such solutions remains.
Due to economic doldrums and rising interest rates, companies are already grappling with high capital costs, and investors are wary of deploying sizable investments into companies with evolving risk profiles. This situation is ripe for policy interventions.
Policymakers can introduce models that lower the cost of capital for corporate efforts that yield climate adaptation and mitigation results. Companies can capitalise on such opportunities to generate ESG-friendly business strategies that attract investors and unlock outcomes that complement the objectives of Cop28 as well as long-term goals like the Net-Zero by 2050 target.
When the flow of investments towards impact-led companies occurs at scale, it leads to the standardisation of climate adaptation and mitigation in corporate cultures. The vicious ‘take-make-dispose’ cycles that have permeated the private sector can thus be turned virtuous, with corporate social responsibility, environmental responsibility and circularity making inroads.
Though this paradigm shift requires governmental undertaking, the intent and will of the private sector also take precedence.
In recent years, the private sector in the region has made waves by churning out solutions and contributing significantly to the global economy. As the region takes a leadership role in shaping the international climate-action discourse and simultaneously pursues its long-term sustainability goals, companies must follow suit for their own operational resilience and business prospects.
The upcoming Cop28 summit will help to clarify how the private sector can synergistically support the government’s climate actions while making positive change feasible on the business front.
Main image: In the UAE, climate change has been manifested through erratic rainfall in recent years
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