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Executive Perspectives

EXECUTIVE PERSPECTIVE: The promise of innovation

Kate Wolfenden

27 Mar 2019

“It doesn’t take dramatically more person-power, or more resources to think like a system and/or develop a programmatic approach, it just takes smarter action.”

Kate Wolfenden is a leader across many different organizations dedicated to a more sustainable world.  Her theory of positive change is built on a concept of “connectedness”, which at its heart is about bringing wisdom, empathy and communication to the many silos of heroic activity underway to help make our world a better place.  She is an innovator at heart, and we sat down with her to understand her approach.  Tim Nixon, Managing Editor, Thomson Reuters Sustainability.


Tim: How would you describe the state of innovation to help meet the Paris Accord 2 degree goals?

Kate: I would say, making progress, but we need focus.

We all know that the next 11 years are some of the most critical humanity has ever faced; that we are transgressing several environmental tipping points far faster than we collectively envisaged and that we are struggling to apply the breaks.

We also all know there is no doubt that innovation is central to the solution.

However, to be the elephant in the room here, from my perspective, it’s not that there isn’t enough innovation in the world – there is probably too much, it’s just not scaling at the rate and the pace we need it to.

Similarly, its’ not that there isn’t enough money in the world to scale it, it’s that, very often, there is not enough of a risk mitigated pipeline to invest in and/or the means to enable multiple stakeholders groups to agree on what most scalable and sustainable solutions are to focus on in order to leverage the right amount of funds from the best sources to get the scale and momentum we need.

All this is contributing to a slow-down in progress. We can sometimes become romanticized about the amount of money and corporate attention being channelled into climate action and the SDGs, but without focus we will fail.

That being said, the good news is, we have some good building blocks.

The first round of INDCs are starting to be turned into investment strategies via great initiatives like the World Bank NDC trust and the NDC partnership. We have some excellent, heavily invested in, shortlisted research of the most scalable solutions and sensible pathways, like Project Drawdown and Exponential Roadmap.  We have new pools of impact focused publicprivate, philanthropic and concessional finance evolving every day and we have pockets of political will. What we need much more of is programmatic approaches to picking up the momentum. Project X’s approach to corporate systems acceleration within markets and the Blended Finance Task Force from Systemiq are two great examples of just this.

Tim: How do we organize for more efficient impact in the short time remaining to do something on climate mitigation?

Kate: One thing through all of this is clear to me – unless we are talking about the C-suites of the top carbon emitters or the Gen Z’s, the world may have enough leaders. What I don’t think it has enough of yet, is connectors.

People who are motivated by collective good and prepared to be the glue between the walls and the grease on the wheels, not just within organizations but between them.

This trend is identified in the Climate Investment Funds 10 year anniversary future of climate action report: Organizing Beyond Organizations.

This is perhaps best illustrated in the tireless work of the development of the Paris Climate Accord. Albeit not perfect, it, together with the SDGs, are ‘many-handedly’ two of the greatest achievements for humanity’s plight to tackle climate change and live in a sustainable world. Leaders might have signed the papers, but it was the unsung glue and grease who enabled the political will. Now imagine if we could garner the same amount of interlocutors and impetus in investment and industry, who felt the same commitment to translate these goals into actionable and investable strategies, too.

Tim: Where is there the most promise?

Kate: I have two things here.

  1. Programmatic approaches. From some of the institutional players, I see great promise in clever public, private and concessional finance blends – e.g. CIF investment fund and/or the systematic approach the World Bank is aiming to make on developing country by country investment strategies into which bottom up financial flows can plug in to. From an emerging trend perspective, I see great promise in new private sector investments models, like the one set up by Innovator Capital. This new global green investment bank was announced alongside the 8th Secretary General of the United Nations, Ban Ki Moon, with a cornerstone investment of $1b pledged from the Investment Association of China and a further living trust commitment by the largest solar developer in the world, Sky Power, working up to c. $50m investment annually. The model developed here is working on fast transaction rate, early stage tech deals – providing investment as a service to action on climate and the SDGs. Several international sovereign and state funds are now being engaged to join the fund, which will be underpinned by an integrated SDG and NDC aligned investment strategy and provided as a means to support nations to deliver on their global commitments. Perhaps most interesting between these two trends, is the opportunity to connect these new pools of private sector capital with the other public, private and concessional funds and approaches mentioned above.
  2. Increased transparency. It kind of blows my mind that just 25 of the biggest companies in the world are responsible for c. 15% of global emissions – as you say, Tim, these companies represent the difference between catastrophic climate change and our chance of being able to stay within a 2 degree world. And yet, some of them aren’t even reporting what they intend to do over the next 10 years to prevent that. We as citizens, investors and consumers are collectively enabling the silence, when we could instead be enabling the transition. Luckily there is some excellent ground work going on in this realm, and of particular importance the Transparency Initiative for Climate Leadership work emerging from Thomson Reuters and its partners. Not only is the data they are crunching providing clear evidence that the worlds’ biggest super emitters who are decarbonising, are in the majority of cases outperforming their peers financially, but they are also exploring hosting an annual summit to engage this community in shared learnings and unique market and finance enabling support mechanisms to support decarbonisation activities. This really excites me and I look forward to talking more about it soon.

Tim: Where is there false promise?

Kate: Wherever there are silos. It doesn’t take dramatically more person-power, or more resources to think like a system and/or develop a programmatic approach, it just takes smarter action.

Tim: Is relevant innovation just technological, or are there other types which may matter most?

Kate: No, I don’t think it’s purely a technological challenge at all.

Project Drawdown is a great example of the breadth of solutions required.  They list the No 1 most impactful solution is in fact a technology, but not a ground breaking one and fast following at No 6 is educating women and girls.

There is little doubt now that to come within a chance of reaching our 1.5/ 2 degree goals, Technology must play a critical role  (i.e CCU/CSU delineated in the IPCC 1.5 degree report) but it won’t be the silver bullet.

Each company, industry, city or country will or should have its own decarbonisation roadmap and in all cases it will take a combination of approaches – new systems, increases in efficiencies, step changing technologies, governance reviews, shifts in ownership and financing, consumer education and more, and a whole heap of CCU/CCS on top to create a sustainable trajectory.

One innovation that particularly impresses me at the moment is coming from Estari Group and is an innovation in finance. The ‘S Bond’ initiative, is, in my humble opinion, a remarkably clever and pragmatic way to systematically crack open the otherwise sluggish transition of the $100tr vanilla corporate bond market to incrementally more sustainable investments over time.

With in-market evidence that sustainability performance reduced cost of capital mechanisms already exist (Solvay and Danone as two examples), the focus is not to prove this is possible – It is fine tune it, standardise it and wholesale it for the bond market. Focusing on the next 13.5% on the adoption of innovation curve, this represents a circa $10tn opportunity in the coming years. This work is also very complimentary to the earlier thinking from Latham & Watkins on Green Striping, so we look forward to seeing how the two can dovetail.

Tim: Who should we be trying to empower to catalyse meaningful action on climate?

Kate: A great many. But of the under-represented, I would say three groups:

  • Women, or indeed anyone demonstrating more feminine and collaborative approaches to leadership
  • Gen z, perhaps earlier than society would deem them acceptable or capable of influence
  • Connectors

Tim: At the beginning of your day, what gives you hope in humanities ability to solve the climate crisis?

Kate:

Day to day? I would say, relationships.

No innovation or investment of technology has come into being without the relationships that made it happen. No strategy, treaty or global agreement has either.  Relationships, built on respect during difficult conversations, empathy, understanding and well earned trust, give me hope.

In the bigger picture, thoughand perhaps somewhat paradoxically – I find hope in the human condition.

As a collective society, it could actually be our biggest weaknesses that will be our greatest strengths.

Eventually we will all personally start to feel the sting of the damage we are doing to our world and the emotional and spiritual stability of the humans that live within it.

When enough people personally feel this, change will happen.


About Kate:  Kate is Co-Founder and Non-Executive Director of Project X and sees herself one of a collection of individuals required to become the glue and the grease on the wheels of collective climate action.

In order to offer a contribution, she has brought together a small portfolio of systems change or systems optimisation initiatives that she is working with as a board member, advisor or as a special project in order to accelerate industrial and financial action on climate. Of the ones that can go public, the portfolio includes Project X, Landscape Finance LabEstari Group, Innovator Capital’s Sustainable Finance & Investment CorporationTomorrow’s Capitalism Enquiry, the Transparency Initiative and Future Planet.  

 

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