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• MA: Michael Avery – TV and radio personality and Business Watch host on Business Day TV
• BP: Belynda Petrie- CEO and co-founder of One World Sustainable Investments
• JM: Jarredine Morris, Energy and Environment Manager at Business Unity South Africa
• BM: Dr. Brian Mantlana- Impact Area Manager for Holistic Climate Change at the Council for Scientific and Industrial Research

• 00:00 Introduction

  MA: Welcome to the show. You're watching Climate Conversations on Business Watch with me Michael Avery. COP26 has arrived and we're discussing whether we're turning the tide on climate change, as always brought to you by Investec.

  We've cut through the hype to the real issue so far in this series from what the overall focus is for the South African government heading into this super COP.

  We've debated the race to net zero and whether the science is actually congruent with the promises and a lot of the greenwashing potentially.

  We've discussed the looming climate finance fight, and that's certainly getting underway in earnest this week, and how this is shaping responsible investing.

  And then last week, we previewed the all-important G20 Leaders’ Summit and the role of export and agency finance in funding the transition to cleaner energy for the world.

  Now obviously the big news for us this week has been the announcement of that eight and a half billion US dollar Just Energy Transition partnership to help South Africa transition away from fossil fuels to stimulate green hydrogen and the production of electric vehicles.

  The two-day Leaders’ Summit is now over, and the world leaders can go and jet off back to sunnier climes, the COP26 is really just getting started now. Attention is going to be turning to the negotiations between delegations on finalizing the Paris rulebook and it's not going to be easy six years on from Paris issues like Article Six about carbon markets are unresolved and for a good reason.

  To get the latest from COP26 it's a great pleasure to welcome Belynda Petrie, who's CEO and co-founder of One World Sustainable Investments, also a former research associate at the South African Institute of International Affairs, she's also in Glasgow at the moment.

  Dr. Brian Mantlana, who is an Impact Area Manager for Holistic Climate Change at the Council for Scientific and Industrial Research. And Jarredine Morris, Energy and Environment Manager at Business Unity South Africa, also in Glasgow.

  Firstly, and welcome, let's get the mood from COP26. From what I've been hearing, it's been a little bit chaotic in the last few days. Belynda, how would you gauge the mood? Is it more Hopenhagen which became Chokenhagen or is there a sense that we might actually get a deal out of Glasgow this year?

• 02:35 Excitement around historic R138bn deal for SA

  BP: Well, I mean, of course, there you know, different people have different expectations, and this COP is interesting, because we didn't have one last year and there's a lot of work to be done.

  It's hard to say the mood is bad given that I'm a South African and we reached a fantastic climate finance deal for South Africa, which I'm sure you know about, which will if it works enable the Just Transition and some of the key energy transitions that are needed in this country, not only because of renewable energy, but also because we have energy security issues.

  So personally, I'm excited given that deal and I think that particular deal,. It's been very good to see Eskom play a prominent role in the climate finance space and a very positive role given the negativity that surrounded it and I think that is spurring international interest.

  That said, there is a lot of work to be done and there are high expectations out of this COP and it's early so we will see, but as I say I'm excited.

  MA: It's for once really encouraging to be a South African at one of these global events.

  Jarredine, we appear to be the belle of the ball on the back of that announcement this week. And it's amazing what a bit of foresight and preparation and planning can do, and Eskom I think certainly need to be credited a lot here.

  What do you get in terms of the mood around the South African delegation at the moment as BUSA?

  JM: Yes, exactly it is just vibey I don't know how else to put it. Everybody's excited. Everybody's positive. You know, there's been quite a few logistical challenges I think with the COP, but I think notwithstanding that everybody is in really good spirits.

  The pavilion where I'm sitting at the moment has been very popular. We've got some events coming up. A lot of collaboration between South African business, there's quite a few of us here, a lot of civil society and the official delegations.

  So we actually had one of the members of the negotiating team pop by yesterday and just to say as well that, you know, it seems quite positive in their areas as well but a lot of work, long days all around. But I think everybody's coming together as we do as South Africans I think there's a lot of that kind of spirit around.

   

• 05:07 Real hard work starts after deal announcement

  MA: I've heard in the corridors that the Rockefeller Foundation, for example, will be launching a massive Just Energy Transition platform some 10 billion US dollars and wants to reach out to the South African delegation.

  It's that kind of energy that we're experiencing at the moment, certainly from afar back here in South Africa it's been splashed all over the newspapers this week, this deal.

  That said though and Brian I know your area is adaptation and we'll come to that, but watching from afar as you do a COP event like this, how does one sift through the hype, the noise, the 137 trillion Rand announced by Mark Carney which sounds to be too good to be true, versus the real issues here, and what is greenwashing and spin?

  BM: Well, I think firstly, it's to welcome the news. It's to welcome the initiatives that are unfolding.  There is no doubt that there is a massive need for that kind of injection in the country, that kind of investment.

  Remember, that kind of investment goes beyond the financial aspect it touches lives. So this news is just overall very positive for the national response to climate change.

  MA: And we know there is going to be a technical working group established over the next six months, and then over the next 12 months, tech transfer.

  So it is more than just financial flows it's a real partnership and using South Africa as this test case.

  I was chatting to Antony Phillipson yesterday, the British High Commissioner to South Africa, and he says the real hard work starts now, after the announcement.

  Belynda to bring you, how do we leverage this funding and that really is about what this COP is about, isn't it? It's the finance COP isn't it? What do you see as the hot button negotiation issues that are still ahead of us?

  BP: I think one of the key issues that, and this has plagued the negotiations. Brian can attest to this for a long time, is around adaptation.

  And if we're going to talk about the finance which this COP is very focused on as you say, finance for adaptation and a much more balanced approach.

  So Paris, you know, set that up, right, setting up a balanced approach between adaptation mitigation in terms of climate finance flows, for example, through the Green Climate Fund, but that hasn't really happened in reality.

  And this is a bugbear of note for developing, and I think developed countries alike if we are honest about it. So I think a better balance between adaptation and mitigation and much more financial flows and quickly to adaptation because Paris was now I think, a long time ago, six years if I add up correctly.  Six years is a long time in the climate change impact space.

  The other aspect that I think is critical, and its key on the table at the moment is the review of how much climate finance do we need? So a review of the 100 billion that's been pledged per annum. Is that enough and what is the new target from 2025, including embracing the adaptation issues that I've raised.

• 08:51 Investment risks in developing countries

  MA: On the adaptation issues and maybe, Brian, it's good to bounce back to you on this point, because it's something that the Environmental Affairs Minister said before the South African mission left to COP-is that she wants to really focus on adaptation. 

  I know at the CSIR has advised in this area. But the problem seems to be to demonstrate a palatable, immediate return on investment when we investing in these adaptation projects.

  It's a lot easier to say, well if we mitigate by decarbonizing and investing in renewables, even though those IRRs have come down to 11, 12%, in bid window five, it's a lot easier to make the investment case there than it is for adaptation.

  Take me through some of the challenges here.

  BM: Yeah, you know perhaps let me take a step back and talk about COPs and then I'll come back to the adaptation issue. I think it's important to note that one of the key aspects about the process of COPs generally, is about continuity.

  So it's about momentum. And this COP has managed to happen amidst a lot of uncertainties and that is highly commendable. And in doing so it has generated momentum, once again, just like we did before Paris, about the climate change at political level and at social level and even in the financial circles, and we're seeing that happening.

  So that is a positive feeling coming from this COP, I thought it's important to mention that COPs are an important cog in the global response to climate change.

  Coming then to adaptation as an issue. One of the buzzwords that is happening that stems primarily from the Paris Agreement is this notion of the just transition.

  And the question is, how does that just transition link, how does it materialize domestically? What how does it manifest itself practically in a lived environment? And there in my view is the avenue of adaptation.

  So seeing this notion of transitioning the investments in fossil fuels to renewable energies? What is that, how does adaptation fit in there? In my view that is an opportunity that us who work on adaptation, we still need to better define that area and say, how does that how does just transition as a concept manifest in the adaptation phenomenon?

  And my sense is that we have there's still scope that needs to be done there. We have not covered we have not made that business case clear enough that these are the tangibles when it comes to just transition on the adaptation front.

  When you hear the notion of just transition, and one tries to frame it in the context of adaptation, we talk about jobs, and I find that narrowing the conversation because it still links it to the financial sector.

  It takes it slightly away from the lived environments that we that are affected by the transit by the mechanical transitions that are going to happen.

  MA: On that point, Brian can I interject just quickly, because and I'd like to get my own head around what and how we better define this. And I want to use a concrete example here, take Eskom and what they've proposed to do at Komati power station, for example.

  Where they are retrofitting it with solar PV, they are turning the land into agricultural kind of co-op type use. And in so doing, they seem to be not only just mitigating but adapting at the same time.

  So there seems to be a blending of the two here is that potentially what's also creating a difficulty in defining what we mean here between mitigation and adaptation.

  BM: Just building on what you are saying, then the question is the lens through which you say that is it for me, my sensitivity is that it's still primarily focusing on emissions and adaptation takes a backseat.

  And as Belynda was saying earlier in my view, we still need to find a way of framing this discussion where and I'm not saying adaptation is the main option here.

  All I'm saying is, we need to find ways of saying how do then these activities that are mitigation focused, profile the impacts on the adaptation front, profile the livelihoods directly, and not only through the mitigation.

  So yes, the synergies are there, but perhaps it's about better telling the story, better narrating the story, better clarifying what exactly is the impact on the ground.

  And my sense is that there's still room for improvement by us, in particular in the research side to better quantify the impact of these core benefits between mitigation and adaptation.

• 14:49 Disclosure is important to assess damage

  MA: From business perspective, Jarredine, how are you viewing the adaptation conversation and where business can obviously play a role here because we're going to need lots of private sector funding in order to not only mitigate, but also to adapt to climate change?

  JM: Yes, exactly. So it's, you know, I think I'm probably echoing my colleagues when I say that adaptation has long sort of been the poor relation, in terms of even the COP negotiations.

  But in the momentum, to build on Brian's point that they've built in terms of this COP, there's been a lot of effort to pull adaptation and the goals into it.

  There are specific goals under the Presidency Program in COP that talk to adaptation and to loss and damage, so I think that's really important.

  From a business point of view, I think what's coming through very strongly in a lot of what we're engaging with both the South African business and also on some of the international platforms that we participated in already, is the link between disclosure.

  So the need to identify what the risks are, and not just in terms of the mitigation risks, but the actual climate-related impacts. Like extreme weather events, heat shifts, and, you know, to things like our agriculture, and things like that. 

  These haven't received as much attention as they should have. And again, particularly South Africa, Africa, developing nations and island states who are most vulnerable to the impacts of climate change.

  So there's a lot more recognition this year than I've seen previously, over the last few years, that we need to be building that resilience.

  So a lot of work, as I say, is being done on how we can identify those risks. But really disclosure is very important. I've been to about seven events already and you know, whether it's finance ministers from key countries, or whether it's, you know, small SMMEs, giving examples of what they're doing on the ground, it's disclosures.

  It's everybody working together to try and standardize ways that we can identify what the risks are, and then put together actions to deal with them.

  So the real need for this transparency, which also creates the platform for investment. So I think the point was made earlier that we generally are focusing on how do we get investment for mitigation.

  But again, if we're transparent and we show what the risks are, then we can encourage that investment.

  Yesterday, the Scottish government pledged a million pounds towards rebuilding and resilience-building efforts. And that's the first kind of financial commitment linked to loss and damage funding, which is also an area under the Paris Agreement that they're still working on.

  And that first finance is crucial because you need that similar to the Eskom (deal), you know, there's eight and a half billion, once you kind of get that first financing for something that seems a little bit risky and uncertain, you get a lot more appetite to follow.

  So it's really giving us again, a lot of excitement for a bit of a step change.

  MA: And that is the role for governments and DFIs to play in this space. To take the first loss to take the first risk and then to hopefully, you know, use that in a blended manner to bring in the private sector.

  And I see the IFRS Foundation said yesterday, that's the global body that damns us with damned accounting standards, has said that it's going to be focusing a lot more on disclosure.

  On making sure that there are a standard set of disclosure requirements so that investors can make these informed decisions.

  And Belynda, that seems to me to be an important missing piece of the global jigsaw puzzle here. You've got Mark Carney, as I said, standing up saying we've got 137 trillion Rands worth of assets under management here that are ready to help us achieve net-zero.

  But if you don't know what you're measuring, and what the risks are, it's very difficult to direct those private sector capital flows.

  So what do you make of the talk now about improving disclosure around those climate-related risks?

• 19:01 Danger of lack of disclosures preventing investing

  BP: The cynical side of me wants to say that it's talk and the positive side of me wants to say that I'm glad there's talk.

  So let's just put that in context. Disclosure is critical I think Jarredine is right. It sets up increased access to finance, and stimulates commitments.  So I think it is important.

  But I'm reluctant to concur with the sense that we've got to go, so Brian I'm looking for a balance here, we need to standardize. Or sorry, Jarredine, I think it's you that said it.

  We do need ways of assessing risk and all of that, but we could spend the rest of our lives and the lives of the next generation, and the next, doing that.

  So can we please look for a balance between disclosure and (action). I'd much rather talk about transparency. We are going to make mistakes as we go along, and we need to make those mistakes because we learn lessons from them, and we do it better next time.

  So there is this sort of adaptive management just to bring the word adaptation again, story that must go on and I think we must promote that.

  Balance that with this disclosure need. Because we can hide behind disclosure, or some people could hide behind disclosure and hold back on increasing finance.

  So transparency to me is a better word in a way because we need that. And Jarredine just to add to your point, I think it's transparency and disclosure, but you know there rules that go with disclosure and those rules can take us forever, whereas we could just be transparent about what we're doing and the mistakes we make and the gains we make.

  And just while I'm quickly talking, I won't be long Michael. I just also wanted to add that, you know, one of the key things when there are these high-level champions that have been set up for this COP.

  I like what they're intending to do just around this disclosure transparency discussion.

  Because there's a focus there on transparency under one of the champions and networking, you know, bringing together initiatives and country action plans.

  I think that also because there's a lot of finance going into initiatives, you know, a range of global initiatives, then there's a lot of finance going into supporting nationally determined contributions.

  And I like the idea of bringing those together and building transparency out of that. And I don't think we've spoken enough about ambition today.

  Because the real comment I wanted to make here is, you know, we can quantify where we're going with adaptation and build the adaptation business case, but quantifying against what we don't know what temperature rise it's going to end up being.

  We don't know if we're going to be at two degrees or four degrees actually because we're not achieving the two-degree target.

  So I think we also have to be careful of what we're facing here and not limiting ourselves too much. 

   

• 22:10 How do we quantify progress made in adaption?

  MA: And I want to quote the UNDP's Production Gap Report that point out where we're actually heading, between all of the lofty promises and the rhetoric, and it reckons that we are on track to be producing around 110% more fossil fuels in 2030, then would be consistent with limiting the temperature rise to one and a half degrees.

  And 45% more than for two degrees. And by 2040 on this pathway, that excess grows to 190 and 89% respectively.

  So we're missing our targets even for that. And given that the science is so unequivocal here, one has to question then why we are not turning the corner on fossil fuels.

  But just as we end off here, Brian, on this whole issue of adaptation, because I know one of the big focus areas in this COP is going to be focusing on nature-based solutions and we hear so much about the circular economy.

  What is your sense of using this kind of low tech, seemingly obvious solutions to help regreening and reforestation and the like?

  BM: Yeah, you know Michael, I just want to pick up on the thread that's been coming through in this conversation amongst the four of us.

  Jarredine talked about resilience building and risks and Belynda is saying well quantification part we can always improve over time it's important.

  But let's not get stuck into it, we need some form of balance. I just want to remind you Michael, and your viewers and listeners that one major advantage of dealing with greenhouse gas emissions is that they are quantifiable.

  They've got a unit of quantification, which is greenhouse gases. When it comes to adaptation we do not have that variable that shows the changes over time.

  Now, that's important, because the length of that variable over time, makes monitoring of impacts challenging when it comes to adaptation.

  Because that monitoring of impact over time is difficult. The flows of finances for adaptation have been limited because of that reason.

  Primarily because of that reason, at least that's what we've been told in some circles. So there is a genuine need to improve the methodological toolbox in the adaptation space so that we are better able to quantify the impacts of various actions and responses over time.

   

• 25:03 Nature-based solution for adaption

  BM: Now coming to the issue of nature-based solution. Again, I want to come back to this example that Belynda mentioned of improving over time.

  Nature-based solutions have always been attempted for decades. And but perhaps what we're talking about now is scale and emphasis.

  So I think that that's where the effort is. But if you go to the mitigation side of quantification of GHG emissions from the terrestrial ecosystems, that is the sector that has got the largest.

  Every community we've learnt to live with the uncertainties that come from the GHG emissions from soils, from trees, from the biosphere and yet we're struggling to live with those uncertainties when it comes to adaptation variables.

  So to me, there's that balance that we need to improve, of learning to live with minimum certainty in terms of quantification of adaptation impact.

  Just the same way we have learnt to live with the quantification of mitigation impact.

  Especially on nature-based solutions.

  Lastly Michael it is important, the focus on nature-based solutions, it's always been around us, it's always been there.

  But the key thing that we need to focus on in my view is scale. It's about doing more at scale, what we've been, what the ecosystem, the terrestrial, even in the oceans, the sink that is there that we need.
  

   

• 26:54 A week for SA to celebrate

  MA: We have to end it there sadly.

  We have run out of time, just as we're really getting our teeth stuck into this.

  And hopefully, someone will send me a deep-fried Mars bar to get my teeth stuck into as well from Glasgow!

  It's a week to celebrate, there's still lots to do. Still lots of hope and lots to go at COP. But at least this week, South Africa can celebrate what it has achieved in that agreement for eight and a half-billion dollars to help us with our Just Energy Transition.

  That was Brian Mantlana of the CSIR joined by Belynda Petrie, CEO and co-founder of One World Sustainable Investments and Jarredine Morris, who is in Glasgow as the Energy and Environment Manager at Business Unity South Africa.

  And that's Climate Conversations on Business Watch with me Michael Avery as COP26 is in full swing. Will we turn the tide on climate change?

  Well, I guess the next few days are going to be absolutely critical. As always, this has been brought to you by Investec.
  

   

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