27 DEC 2018
Local data is the key to sustainable development
The Intergovernmental Panel on Climate Change’s (IPCC) most recent report has made the strongest call yet for rapid action on climate change. The stakes are clear: we need to up our game or face the grave consequences of a 3˚C+ world. That requires the sharing of knowledge and expertise amongst those affected and credible data for investors to assess.
Getting real on climate change means understanding that millions and billions of investment aren’t enough anymore. Meaningful action on climate change while also achieving the United Nations’ Sustainable Development Goals (SDGs) requires trillions of dollars of investment in the coming years – money which isn’t currently flowing and which the public sector alone simply doesn’t have.
To accelerate investment our focus now needs to urgently shift towards providing investors with the information they need to commit sufficient funds and create conditions within which local markets can grow to rise to the challenge.
First and foremost, this means providing stable, reliable, standardized and comparable data to guide investment decisions. Second, it means taking a more holistic approach to how we assess the impact of business decisions, looking across the pillars of action to achieve the SDGs and accelerating domestic ownership of knowledge and entrepreneurial growth in local markets. Evidence, knowledge and local understanding are critical to achieving this.
Recognition of the systemic impact of our economic choices is also vital. That means building knowledge of investment and performance in energy and climate change, water, agriculture, electrification and mobility, biotech, as well as facilitative technologies from the internet of things (IoT) to artificial intelligence (AI). The only way to really do this effectively over time is at a local level, where people have a visceral understanding of how the world around them is changing.
We cannot succeed at this without finding new ways to access, analyse and assess the data underlying financial decisions and their impact. In the developed world there is a growing number of campaigns to accelerate this, from the Task Force on Climate-related Financial Disclosures (TCFD), Transition Pathways, the Principles of Responsible Investment, the Global Reporting Initiative, UN Global Compact Principles and more.
Where we see considerably less focus, however, is on using these principles and approaches in the development of markets in developing countries. There is some amazing work being done from Africa to Asia through the Building Resilience and Adaptation to Climate Extremes and Disasters (BRACED), Renewable Energy and Energy Efficiency Partnership (REEEP) and Private Financing Advisory Network (PFAN) and many others – but what we really need is scale. A critical part of the process is catalyzing funds committed to the developing world in order to ensure that development advances in a sustainable fashion. Yet there is little centralized, standardized and reliable data from developing and transition economies and without data, investors are wary of commitment while policymakers can be slow to be convinced.
Information on the efficacy and impact of companies, projects and programmes in both climate and sustainable development is often poor, fragmented and collected using different methodologies. Understanding of the real-world impact companies exert is poor, incomplete, non-standardized, or inaccessible – every choice has an impact, from the purchase of goods, use of energy or taxation and regulation. At SOAS University of London, we are developing a project that aims to transform that situation, with the launch of the non-profit Climate and Sustainable Finance Data Initiative.
This Initiative is intended to be a global network, owned and operated by research centers in member countries around the world (from Burkina Faso to Bangladesh). A standardized database will be shared between members, ensuring the robust and standardized collection of data in domestic markets.
The Initiative will provide up to date tracking of the developing stock of private and public actors’ commitments in sustainable and climate finance. The database will include both quantitative and qualitative data, providing researchers around the world with a wealth of original data to research and analyse.
The Climate and Sustainable Finance Database will enable researchers, practitioners and others with an interest to see not only how much public and private money is flowing to and from developing and transition economies, but also to better understand both positive and negative impacts, enabling factors and barriers. This information can, in turn, be used to accelerate further flows of finance and enhance the effectiveness of existing investment.
Critically, the initiative will provide database and research training as well as digital learning on climate and sustainable finance to centres in the developing world. The long-term goal is for domestic research groups to become centres of climate and sustainability entrepreneurship, sharing financial and business models which work for specific markets.
By working together there is an opportunity for the developing world to leapfrog many of the mistakes of modern development, identifying and using cleaner forms of energy, protecting land and livelihoods and, at the same time, creating a more equitable future. If we can do this through the process of encouraging far greater investment in climate-friendly, sustainable development in the markets most in need, we might have an actual shot at solving the climate crisis.
If you are interested in becoming part of this global network, please contact email@example.com for more details.
By Felicia Jackson / Author and Founding Editor, Bloomberg New Energy Finance