Highlights from Climate Week 2023: The Burning Man for climate geeks

Biodiversity, transition finance and a sense of urgency around climate resilience and mitigation were some of the focus areas of Climate Week 2023 in New York, dubbed the “Burning Man for Climate Geeks”. PSP Investments’ Herman Bril and Stella Y. Xu reflect for on the highlights from Climate Week which they attended this year. They didn’t attend Burning Man in 2023.

Climate Week NYC completed its 15th year as the world’s largest global climate event alongside the UN General Assembly, bringing together a global nexus of policymakers, academics, investors, and corporate leaders.

The New York Times dubbed this year’s summit as a “Burning Man for Climate Geeks”, referencing the week-long large scale desert event in Black Rock City, Nevada that emphasizes decommodification, civic life and leaving no trace on the environment. Contrary to the recent flameout at Burning Man from climate-induced flooding, the mood in NYC was reservedly optimistic with an undertone of urgency. Our team spent a hectic but energizing few days navigating a dizzying array of 400 sessions, workshops, and dinners, where discussions likely signpost many topics that are expected at COP28 in November.

What is clear more than ever before is that Climate Week is not just about climate. Just as the theme of Burning Man this year was “Animalia”, celebrating the animal world and our place in it, Climate Week NYC kicked off with the Taskforce on Nature-related Financial Disclosures (TNFD) publishing its final recommendations to guide companies in disclosing their dependencies and impacts on nature, following the adoption of the Global Biodiversity Framework (GBF) at Montreal’s COP 15. Discussions around geopolitical risks as well as geo-economic policy measures impacting energy accessibility, affordability and sustainability also took center stage, reflecting that a geopolitical lens now also impacts investment decisions and risk management. Domestic election cycles, polarization of ESG in the US, and the need to detangle ESG from culture wars were also recurring themes.

This year Climate Week followed a historic stretch of weather extremeness which culminated in California Governor Gavin Newsom announcing his intentions to sign the California climate disclosure bills into law. The Glasgow Financial Alliance for Net Zero (GFANZ) also launched a consultation on its work to further refine the definitions of its transition finance strategies and support financial institutions to invest in real world decarbonization Paris-aligning strategies. Development in climate technologies from solar to EVs and nuclear fusion may accelerate mitigation efforts, but blind spots remain, ranging from grid expansion and permitting to emerging market green transition investment gaps. Discussions around the role of AI and its ability to unlock vast potential for renewables, specifically around advance prediction capabilities and automation capability, further supports the narrative that Moore’s Law is still relevant and will be for the coming years.

Several sessions also highlighted the significance of climate mitigation through Internationally Transferred Mitigation Outcomes (ITMOs), reflecting a significant milestone for the Paris Agreement. ITMOs are a mechanism for countries to sell emission reductions to other countries or companies to use toward their own targets. Recently, the South American forest nation of Suriname announced plans to become the first country to sell carbon credits, an innovation which can bring much needed financing to developing countries to accelerate clean energy transitions. The United Nations Conference on Trade and Development (UNCTAD) recently called for urgent support of developing countries to attract investment in clean energy as much of the growth in renewables investment since 2015 has been concentrated in developed countries. The choices developing countries will make as they progress will shape climate risk for all and should be viewed as a matter of urgency for the investment community.

At the same time, more focus is needed on adaptation and to build resilience for the future. As the climate crisis deepens, climate resilience defined as the capacity of interconnected social, economic and ecological systems to cope with a hazardous event, trend or disturbance, responding or reorganizing in ways that maintain their essential function, identity and structure – will increasingly come to the forefront as we face more frequent and severe weather events.

Two consecutive years of brutal weather – one scorchingly hot, one gloomily wet – at Burning Man should serve as an allegory that the systems-based world we belong to is careening towards a tipping point. Research published last year in Science suggests that the risk of a tipping point accelerating climate warming is now likely to happen in the 2030s. Separate analysis of the planetary boundaries concept, which presents a set of nine planetary boundaries within which humanity can continue to develop for generations, shows that six of the nine boundaries have been transgressed. As long-term effects of interactions among variables are difficult to forecast, panelists emphasized the need for more up-to-date and relevant scenario models for the investor community and to shift away from long-term linear models to shorter-term realistic ones. It is worthwhile for investors to delve deeper into the themes highlighted during Climate Week, as they will undoubtedly shape the conversations at COP28 in Dubai later this year.

Herman Bril is head of sustainability and Stella Y. Xu is senior director, ESG investment research at PSP Investments. 

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