OPEC’s Multimillion-Dollar Fund At COP27 And Its Sustainable Future

Published on: 10 November 2022
by Aaroshi Rathor
money-1604921 1280

The OPEC Fund for International Development will officially launch the Climate Finance and Energy Innovation Hub at COP27. For those unaware, the hub is in collaboration with the United Nations Capital Development Fund and Sustainable Energy to achieve “clean and affordable energy.” For this purpose, it has kept USD 100 million aside to combat the global climate crisis. The aim of this fund is to utilise USD 1 invested from various sovereign sources to USD 4 of green and sustainable capital. How does green capital have any significance to climate change? How do big funds help and provide opportunities for sustainable growth? 

Aligning with UN SDG Goals 

UN SDGs play a vital part in all business strategies and operations as they are a global agenda and not a separate entity for a particular company’s business. They were designed so that any business of any size can find relevance in them.Stakeholders, consumers, and investors  are starting to expect a dedication towards sustainable development goals and prefer to give the go-ahead for deals pertaining to sustainability as one of their main priorities. The big funds help in achieving the goal of sustainability, for example, “Clean and Affordable Energy” is one of the UN goals, and countries are putting forward their plans in achieving them at the COP27.

Talking about the importance of renewable energy, UK Prime Minister Rishi Sunak said, “We need to move further and faster to transition to renewable energy, and I will ensure the UK is at the forefront of this global movement as a clean energy superpower.” Similarly, French President Emmanuel Macron has also praised India and other nations like South Africa, Senegal, and Indonesia for moving away from non-renewable energy sources and switching to renewable ones. Hopefully, these are positive changes that will last and countries would implement in taking action towards achieving them, keeping aside their personal political agendas and working for the common good of the planet.  Hopefully, these are positive changes that will last and that countries will implement.

Transition towards a decarbonised economy 

This is one of the major concerns of companies worldwide. Through this fund, businesses can help economies transition towards saving energy costs and promoting energy security. However, the fund alone cannot manage energy costs and consumption worldwide. According to a UNEP report, despite a substantial increase in investment and a global effort to minimise energy consumption, CO2 emissions increased in 2021. The report also states that global energy price volatility is creating a roadblock in investment in building decarbonisation by governments and businesses. In order to reach a net-zero economy by 2050, it is imperative that climate finance funds are implemented for the global purpose of environmental conservation and concrete efforts must be made through international cooperation by organisations at both the micro and macro levels.  

The OPEC fund has assisted in helping developing countries combat major climate change induced problems. They have provided emergency aid grants regarding climate change-induced crises. For example, Pakistan has been at the forefront of devastating floods that have affected its peoples’ livelihoods.The OPEC fund has sanctioned an emergency grant of USD 100 million for the victims. The funds will help in providing livelihood, shelter, water and sanitation and overall relief operations in the country. 

Conclusion

The OPEC fund for international development aims to double climate financing by 40% by 2030. They have launched the Climate Finance and Energy Innovation Hub at COP27 to step up on climate action. The main focus of this fund is to identify the gaps in green financing in developing countries in a sustainable way. Big funds are essential not only for financial aid but also to meet the increasing development demands in this case, clean and affordable energy and creating innovation for energy transition. 

However, attempts at ‘greenwashing’ from specific companies and international organisations, especially at COP27, have raised serious concerns about the ‘intention’ of industry leaders who, in the garb of taking action on climate change, are ‘lobbying’ for their specific industries, this year in markedly greater numbers. With millions of dollars being pumped in order to combat the climate disaster, only time will tell how ‘impactful’ these funds will be in creating a safe and sustainable future. 

Of course, the main problem with this is that ‘time’ is the one resource we have run out of.

To get the latest updates on COP27, please visit https://www.knowesg.com/cop27 

Share:
esg
esg
esg
esg