January 2023: Top Ten Takeaways in Climate News

The new year started with several important developments in climate that highlight the growing threats of climate change but also inspire optimism. Climate change is now seen by some outlets as one of the top business risks that has the potential of igniting trade wars. On the bright side, last year investments in energy transition equaled global investments in fossil fuels, while natural capital got more attention from the private sector. Here's our list of January’s Top Ten Takeaways:

• Natural disasters caused $313 billion in economic loss in 2022 (Yahoo! Finance) Natural disasters, many driven by climate change, caused global economic losses of $313 billion in 2022, insurance broker Aon estimated on Wednesday, of which less than half was insured. Losses from natural catastrophes covered by the insurance sector amounted to $132 billion, 57% above the 21st-century average, it added, leaving a global 'protection gap' of 58%.

• Cost-of-living crisis and climate change are top business risks (WEF) The current economic crisis and the sharply rising cost of living around the world represent the greatest risk for companies worldwide in 2023, according to research unveiled at the World Economic Forum.  “Biodiversity loss and ecosystem collapse” was viewed as one of the fastest deteriorating global risks over the next decade, and all six environmental risks feature in the top 10 risks over the next 10 years. 

• Net zero possible in 2040s, says outgoing UK climate business expert (The Guardian) With bolder goals and policies from governments, NetZero is possible in the 2040s, according to Nigel Topping, a climate expert and a former high-level champion for the UK's presidency of the UN COP26 climate summit. Topping said his experiences with businesses had shown him that governments could move much faster, without harming their countries’ competitiveness or alarming the business community.

• India Raises $1 Billion from Maiden Green Bond Sale (Financial Times) India on Wednesday sold its first sovereign “green bonds”, in a well-received $1bn issue that analysts said boded well for its ability to bankroll the big investments needed to achieve its climate targets. The government sold Rs80bn ($1bn) worth of five- and 10-year debt, achieving a “greenium”, or a lower borrowing cost than it would for a conventional bond of similar maturity.

• Climate Change May Usher in a New Era of Trade Wars (New York Times) Policies aimed at fighting environmental catastrophes could also result in more frequent cross-border trade wars. The United States and Europe have proposed or introduced subsidies, tariffs and other policies aimed at speeding the green energy transition. But critics say these policies often put foreign countries and companies at a disadvantage.

• Philanthropy can have ‘multiplier effect’ on finance for climate efforts (National News) According to the World Economic Forum, the share of total global philanthropy dedicated to climate mitigation is less than 2 per cent a year. Yet, greater funding for solutions to help to mitigate the effects of climate change — especially in developing economies — could be sourced if more philanthropic money was directed towards it, according to the Cop28 representative for business and philanthropy.

• The Bridgetown Initiative: here's everything you need to know (WEF) The government of Barbados, led by Mia Mottley, the island’s first woman prime minister, is championing a radical initiative that could transform how lending is made to developing nations in a climate crisis. Named after the island’s capital city, the project is being compared to the Mashall Plan of 1948, when the United States provided more than $13 billion of foreign aid to help Western Europe recover after the World War II.

• Clean Energy Sets $1.1 Trillion Record That’s Bound to Be Broken (Bloomberg) Global low-carbon or clean energy transition investment jumped 31% in 2022 with a total of $1.1 trillion, drawing level with capital for fossil fuels, according to BloombergNEF report. Both figures broke new records in global investment in the clean energy transition. These “firsts” are driven by the energy crisis that hit the world last year as well as policy actions that enable the deployment of clean energy technologies much faster.

• Business and biodiversity: It’s time to broaden our focus beyond just climate change (WEF) The planning phase of critically assessing and defining how our businesses contribute to environmental damage is behind us, and now is the time to take action. The responsibility of real climate action primarily falls on the shoulders of governments and businesses, including enforcing, enacting, or investing in effective climate-change adaptation and mitigation measures. We must rally our networks and apply our extensive resources toward solutions that will significantly preserve ecosystems, protect populations and transition to a carbon-neutral economy.

• ESG Watch: Why this year could be a watershed moment for investors on nature-related risk (Reuters) 2023 could be a turning point for climate-related investments to rebound, with increased standardization and stricter transparency. While the impacts of the energy crisis have been far-reaching, it has also accelerated the decarbonisation of the economy in Europe, and shown that a fossil fuel-free future could be closer than was previously thought possible.