Climate change should be a cross-sectoral priority. Investors can’t solve it alone. Philanthropy can’t. Governments can’t. The only way forward is through creative, sustained, and committed partnership.Amy Hepburn
What breakthroughs need to happen for us to both avoid the worst impacts of climate change and prepare communities to adapt to the new challenges that will arise?
There are a few key barriers that keep private capital on the sidelines. The first is data. Private investors don’t have enough data to accurately price risk in emerging markets. Multilateral development banks (MDBs) use databases like GEMs for this purpose, and private investors would really benefit from access to these types of resources so they can have a more holistic understanding of the projects and communities in which they are looking to invest.
A second is that we need better de-risking tools. Investors need to honor their fiduciary responsibility to minimize risk and maximize returns. If they’re taking on risk in new markets, they need better tools to protect those investments. To better address this, the ILN is advising on the development of risk guarantee capital pools and has proposed a searchable virtual toolbox so investors can more easily find little-known risk-hedging instruments that MDBs and philanthropic organizations offer.
A significant obstacle for progress has been a deficit of trust across both public and private actors. While each sector has an important role to play in meeting our ambitious climate goals and targets, they often lack a common vernacular, leading to confusion on the mandates, roles, and responsibilities of each and an imagination deficit on how we can better collaborate and utilize our resources.
The ILN is resolute that tackling climate change should be a cross-sectoral priority. Investors can’t solve it alone. Philanthropy can’t. Governments can’t. The only way forward is through creative, sustained, and committed partnership.
The sense of urgency on behalf of investors, MDBs, and governments invested in our global financial architecture around sustainable development is unprecedented. For example, we have ILN members who are attending COP28 who now view themselves as integral to the solution – not just as funders, but as co-designers of a healthier, greener and more sustainable future.Amy Hepburn
What keeps you up at night about achieving these goals? What makes you optimistic?
In short, what keeps me up at night is the sheer magnitude of the challenge. We know what’s ahead of us. We know how urgent it is. I have four children. I know the opportunity cost of not getting this right for ourselves and future generations. That motivates me.
What makes me optimistic, however, is this willingness across sectors to figure it out. It’s unparalleled. In 2020, when I first joined ILN, it just wasn’t there. There was interest, but there was so much frustration from having good intentions that weren’t manifesting impactful results.
But within three years we’ve launched a groundbreaking cross-sectoral investor-led consortium focusing on private capital mobilization and emerging markets. The sense of urgency on behalf of investors, MDBs, and governments invested in our global financial architecture around sustainable development is unprecedented. For example, we have ILN members who are attending COP28 who now view themselves as integral to the solution – not just as funders, but as co-designers of a healthier, greener, and more sustainable future.
Our Bellagio convening has shown there’s a strong appreciation for the different leadership roles and expertise required for progress. The ILN is committed to leveraging all of our best practices, convening power, and expertise to bridge these sectors and continue to be a positive force for good.
Learn more: Find out more about the ILN, read the Investing in Emerging and Frontier Economies: How Blended Finance can make the most of public funding report, or explore the ILN climate change reports and toolkits, including The Net Zero Investor Playbook.