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January 16, 2024

Editor’s note: Davos talk, technology and EU climate policy

World Economic Forum logo at Davos 2024
While not a venue for policy announcements, the World Economic Forum’s annual gathering at Davos does tend to prompt the release of various studies and business news (Photo: Fabrice Coffrini/AFP via Getty Images)

The latest edition of our Sustainable Views newsletter

Dear reader,

Hello from snowy Davos, where so far my conversations have ranged from discussions about mapping climate risks, to the use of deep learning to design better electric vehicle engines and the ability of technology to nudge individual behaviour (including on political voting) to meet the UN Sustainable Development Goals.

Bringing together investors and people with interesting ideas around the World Economic Forum’s annual gathering does have merit. Though the neon insignia of the world’s top financial and tech companies on display here at Davos can be overwhelming.

Often criticised for its exclusivity and mocked as a corporate Disney World, Davos and the branding bombardment on the Alpine town’s promenade may be counterproductive for the companies that have chosen to put their name in lights. As someone commented yesterday at a reception in one of the many corporate “houses”, it’s like walking through the duty free of an airport, where sales assistants spray you with perfume hoping to lure you into a purchase. “At the end, you have no idea what smells like what, and you just leave with a Toblerone,” he said.

I’m not sure what the famous Swiss chocolate block would be in this analogy (a skiing holiday, while there’s still snow?), but it’s not hard to see it applied to everyone’s message about their commitment to a sustainable world. My Davos acquaintance, however, is still a fan of the event – that’s where the biodiversity investor he works for garnered support a year ago.

And there are many other genuinely interesting conversations happening here, like those I’ve been having at the Doconomy Stage of Impact’s sessions, which began yesterday and will run until Thursday evening (no neon outside the hotel hosting them). FT Specialist, the Financial Times Group division housing Sustainable Views, is the event’s media partner. You can follow us live here.

Later on today, I’ll be talking with the chief executive of UBS Optimus Foundation, Maya Ziswiler, about how philanthropic capital can be used within blended finance to absorb the first, much-feared losses on riskier projects and, therefore, attract greater private investments.

UBS’s foundation has already been involved in two such transitions last year. Amounts are relatively small compared with the size of the financing needed to address the global climate and nature crises, but Ziswiler is optimistic that with philanthropic capital absorbing between 10 per cent and 20 per cent of capital at risk, this type of translation can scale.

While not a venue for policy announcements, Davos does tend to prompt the release of various studies and business news. One of these, freshly made today, is the list of companies that have committed to adopt the Taskforce on Nature-related Financial Disclosures framework: 320 organisations, mostly from Europe and Asia, including a few mining and oil companies, and a bigger number of banks and other financial institutions. We will bring you more on this soon.

Meanwhile, the team in London has been looking at other types of developments. Claudia considers the implications of a change of guard at the helm of the European Council, with Charles Michel stepping down to run as a candidate in June’s European parliament elections. 

This decision is worrying EU observers, who “fear Michel’s early departure could leave the door open for Hungary’s prime minister, Viktor Orbán, to assert greater influence over EU decision-making, given he will hold the council presidency for six months from July”, writes Claudia.

Orbán’s ties to Russia are problematic given the war in Ukraine, as are EU concerns over Hungary’s rule of law and its stance on climate policy. Read Claudia’s piece for insights on what Hungary’s potential growing influence might mean for EU climate policy in 2024.

Also today, we share a new PwC report, which found that of the 4,702 CEOs it surveyed across the world, fewer than half have begun to consider or have fully incorporated climate risk into their financial planning. More than a third have no intention of doing so.

Lastly, you may be interested in a study by German non-profit the NewClimate Institute warning about the greenwashing risks of renewable energy certificates. Companies should focus on long-term power purchase agreements and “hourly matching” instead.

Until tomorrow,

Silvia

Silvia Pavoni is the editor of Sustainable Views 

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