Climate Mitigation and Beyond

What role can private capital play in addressing one of the most pressing challenges of our time - climate change? In this episode, we explore how climate finance can drive both mitigation and adaptation strategies, with a focus on emerging markets. Our guests share insights from the latest developments in climate finance, including reflections on COP29, and discuss how private investment is delivering tangible solutions to combat the impacts of climate change.

Panelists:
Maria Yetano Roche, Senior Climate Impact Specialist, responsAbility
David Diaz Formidoni, Head of Financial Institutions Investments, Climate Finance, responsAbility
Sathish Dhanapal, Head of Climate Advisory Specialists, responsAbility

Hosted by:
Robert Widén, Director Nordics, responsAbility

Transcript

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Welcome to Voices of Impact Investing, the responsAbility Investments podcast. In this episode, what role can private capital play in addressing one of the most pressing challenges of our time, climate change? There has been this number hitting the headlines, 300 billion U.S. dollars, but but 300 billion, is that enough? The answer is clearly no. The estimates indicate that there should be 1.3 trillion U.S. dollars spent in climate finance per year in order to reach our goals from the Paris Agreement. Public funds are there to kick start action and private capital is needed to scale up. To ensure private capital flow to climate investments in emerging markets, you need a good strategy and equally important is also a good capacity. So this is our early realization in the process when we started to scale our climate finance portfolio 10 years back. Climate finance is not about lender borrower relationship, it's about partnership. And for us to build a partnership, you need to have capacity in the form of team who understands the market, who understands technology, and more importantly, the team who is closer to the investee companies. And they're someone who can understand the challenges the investors are facing in scaling climate investments. When you're addressing a problem like the climate crisis, there's multiple issues at once. You need many minds, you need many perspectives and a lot of experience. Don't approach it just from a financing angle. Don't approach it just from an engineering angle, not just an ESG angle. It's everything together. And the second thing is, yeah, stay optimistic. In this episode, we explore how climate finance can drive both mitigation and adaptation strategies with a focus on emerging markets. Our guests share insights from the latest developments in climate finance, including reflections on COP 29, and discuss how private investment is delivering tangible solutions to combat the impacts of climate change. The information provided in this podcast is given for informational purposes only and should be considered neither as investment advice nor as investment recommendation. No liability shall be accepted for the accuracy and completeness of the information. The views presented in this podcast are those of the individual participants and are not necessarily endorsed by responsAbility. Past performance is neither an indicator nor a guarantee for future results. Now join Robert Widén, Director, Nordics at responsAbility as he hosts this episode on climate mitigation and beyond. Over to Robert and his guests for today's discussion. To start off, I'd like to welcome everyone who's listening in for today's session, Climate Mitigation and Beyond. I'm for one very excited about today's session where we will hear insights from the COP 29 and by private capital is essential in financing adaptation and mitigation strategies going forward. We will also hear on the ground case studies showcase practical applications of adaptation and resilience projects. So it is with great pleasure that that I introduce today's panelist to start calling in all the way from India, Sathish Dhanapal, Head of Climate Advisory Specialists at responsAbility. Sathish plays an instrumental role in advising on and developing new climate finance initiatives. It's great to have you with us today. How are you? Thank. Thank you, Robert. Thanks for inviting me and thanks for setting up this webinar. Looking good. Really excited for this session. That's great. Great to share some case studies. Yes, yes, lot more to share. That's great. Looking forward to that. We we also have David Diaz in Zurich. Welcome to you. Thanks, Robert. Great to be here. You you are Head of financial Institutions, investment climate finance app responsAbility. You lead the sourcing, structuring and execution on investments. You're also an expert in designing green lending strategies and tailoring technical assistance programs across the global S. Did I forget something? Sounds about right. Thanks, Robert, but we're happy to hear more from you soon. And finally, I would like to welcome Maria Yetano. You are Senior Climate Impact Specialist at responsAbility. And what I think is extra interesting is that you come from the world of academic academia and research. So I couldn't think of anyone more suited to set the scene for today's session. And I think the listeners are also interested to hear a summary from the COP. Yes, of course. Sounds very, very permanent. That's good. So there, there has been a lot of conversations about the COP the past weeks. A lot of people have attended and everyone seems to at least observed it. So to start, I would like to ask if you could set the scene, why is COP important? Thank you very much, Robert and good morning everyone. Let's really start by maybe the question, what is COP? I think that's also important. COP stands for Conference of the Parties and when we discuss in a climate change space, it refers to the annual UN climate summit where we collectively negotiate around addressing the the climate crisis. And it's a place where over 200 countries this this year got together and discussed in a multilateral setting what can be done. And despite the criticisms that the process faces and has faced over the years, it does remain a place where decisions are made. And these decisions, we can think of them as setting the tone for global action and do influence policy and markets at very different levels and sometimes send extremely strong political signals. The Paris Agreement goals, of course. So, so that's what I could say in what in terms of why it's important, perhaps can you walk through US what everyone's been speaking about, I mean, the past days as well, the climate finance agreement that was reached at the COP 29 exactly. So yes, so maybe a lot of our audience will have seen this in the news. The, the COP 29 wrapped up in the early hours of Sunday in Baku in Azerbaijan. And there has been this number hitting the headlines, 300 billion U.S. dollars. So this number, what does it mean? So this means that has been the agreement that has been reached at COP 29, an agreement whereby in terms of climate finance agreements, I mean the agreement is that $300 billion will be channelled through public finance from developed countries or from historically industrialized countries per year by 2035. Oh well. But, but 300 billion is, is that enough? Uh, so the answer is clearly no. It's, uh, it's, it's still, yeah, definitely falls short, uh, of the, what were the expectations and what assessments and, and different estimates, um, have, um, have calculated in terms of what is the need from developing countries in terms of climate finance. But it is rather complex issue. There has been of course widespread concerned expressed about this and condemnation, but let me just explain that it's not all about this number. There are definitely discussions around the number. The estimates indicate that there should be around a trillion dollars spent in climate finance per year in order to reach our goals from the Paris Agreement. And, and indeed, that's, that's the figure 1.3 trillion U.S. dollars is the figure that the some, many negotiation negotiating parties were asking and putting on the table. This number is not the only issue. It's also a lot about how that number is split between public finance or highly concessional loans and, and, and the private finance and, and, and, and how it's spent. So I just want to make sure that we understand that there's an outcome in terms of a, a figure. The 300 billion has been agreed as a figure, but the number isn't the only issue. Yeah, no, no, but, but this is interesting. I mean, this, this is really sending in a way a message to private capital capital to play a bigger role now. It would be interesting to hear if you see any trends or any specific themes that we can expect to see more from private capital flow into. Yeah, no. And in fact we can link it to this discussion on the on the agreement at COP 29, but also more widely. So one of the discussions is, as I said, what role does private finance play in this 1.3 trillion U.S. dollars needed in investments to mitigate and adapt to climate change by developing countries. It's an incredibly important part of this finance question, but it's even more so now that we see that the, the public finance commitment up to now is, is seems insufficient. So private investment will, you know, have a, a huge role to play and, and this is because of the sheer scale of the total investment that is needed. Then I think we all know it's, it's already clear and COP 29 has reiterated this message that public funds are there to kick start action and private capital is needed to, to scale up. And that's, that's quite a well known approach. However, I'd just like to highlight maybe two things that are coming up in, in the private finance space as emerging trends. 1 is that we're seeing that more demand for increased alignment between what our private financial flows, purely private ones on blended finance with the country's mitigation and adaptation plans and development plans. Of course, economic development pathways in, in themselves need to be the, the, the, the finance flows need to be tailored and we're seeing a lot of frameworks and taxonomies in emerging in that sense. And so, so private finances is, is it we're becoming more strategic and, and it's more about ensuring that private investments are supporting the right kinds of projects and, and doing it so efficiently. And that's one trend. And the other trend would be there's an agreement that more adaptation finance is required, although COP 29 didn't come up with a goal for that, unfortunately. But it is now clear that the there is insufficient focus on it and the role of private finance is becoming more important there. How, what are opportunities for commercial investments for like what's the investment flexible area for private capital in adapting to the effects of climate change? So I would leave it there as 2 main highlights. But there's of course many other issues being discussed at the moment. Yeah, it is a two week conference and then there's a lot of things discussed. So I think you did a great job. I picked up increased resiliency, climate impact whilst generating returns. I like that. That doesn't sound too bad. So thank you, Maria for, for sharing your thoughts on the COP and perhaps this is a good time to take a step back. And I mean you, you mentioned adaptation. Perhaps we should clarify what adaptation is and how it differs from from mitigation. David Diaz, of course, Robert, now happy to happy to provide an intro here. So I think many of our, of our listeners are aware of mitigation, right? And this entails the reduction or the removal of greenhouse gases from the atmosphere. When you think about mitigation, the location of the site is less relevant, right? A solar panel system in Costa Rica and a solar panel system in Mongolia have different contributions in terms of the, the volume of GH emissions that they enable to be reduced. But there's still mitigation. They still serve an important role in helping us and helping us reduce the, the impacts from the climate crisis. In adaptation, it's very different. In adaptation location, the, the, the site is, is paramount, right? Because you have to model the investment on the relevant local climate risks. And this isn't just local Mongolia. Within Mongolia you have different climate hazards based on the geology, based on weather patterns in the north and the South and the east and the West. It's different and For these reasons you really have to have an approach that focuses first on what are the climate risks and 2nd, what are the ways to mitigate those risks, right? There's no one-size-fits-all. I think of it this way. A drip irrigation system in a water scarce country is highly adaptive. You're reducing pressure on local reservoirs, but in a water abundant country it's not right. Whereas we have a different way of thinking of mitigation. Both remain incredibly important, right? And and there is a, there's a movement right now in in climate to talk a lot about adaptation, which is extremely important, but we can't forget about mitigation because they're they're they're both needed in tandem. But what I'm, what I'm looking forward to is seeing how the world comes around the topic of adaptation, because definitions vary, conceptual gaps exist. And here's it's, it's extremely important to have someone that can really bring a tailored investment strategy at the local level, especially given how rapidly these climate hazards are intensifying. So this is a key point to keep in mind. And it's, it's clear that it's, it's not a one-size-fits-all. What do you think, David? Should we, I mean, I asked to teach before he was if he was ready to give some case studies, but should we ask him to give an example on adaptation finance? I think you'll struggle to give just one. He's got 100 cents. OK. You start with one, Sathish. True. Yeah, until one. Thanks, Robert. So one sector which comes to mind when we talk about mitigation, adaptation is water, right? So water across multiple sectors, it has an impact. So. So if you look at, for example, industrial water consumption, right? So we see in most of the emerging market, there is a significant, enormous growth of industries and that adds to significant water demand, right? It's it, it puts a lot of pressure on the local communities because the industry that requires a lot of water for their operations. This is one side. Another side, because of climate change, the water scarcity is water risk is also increasing, right? And then this you see in most of the emerging markets like countries like India, Vietnam and all these countries are exposed to severe water risk. So these two aspects puts a lot of pressure on the industries and also on the communities, right. So for industries, their business country is at risk because they are their processes depend on water and if the water availability reduces, so their business country is at risk and they become less sustainable. And on the other hand, the community, so industries taking water from the communities and the communities, they depend on the local groundwater sources when they need these water in extreme conditions. So, so addressing these two problems, one of one of the solution could be this wastewater recycling, right? So wastewater recycling is an interesting example how this could address both the business as well as a community, right? So when you recycle wastewater, the industries are able to recycle water back into the process. So that way they become more self sustainable and they put less pressure on the water, which is required for the communities. So it enhances the adaptive capacity of the industries as well as the community. So water is an classic example where we could look at adaptation from a broader perspective. But again, this doesn't comes at free of cost, right? So it also comes at a cost when you have to implement a wastewater recycling. It is a CapEx intensive, that's one. But also the wastewater recycling process consumes a lot of energy for recycling the water, especially the operation process which consumes a lot of energy to treat water, recycle water back into the process. So what we see in the market and we also invested in companies who are looking at innovating new solutions thereby reducing significant amount of energy consumed in the wastewater recycling process. So to give example, we have invested in a company called Gradient. So that AUS based company also having a significant operations in Asia. So they have developed many innovative solutions which helps industries to significantly reduce energy consumption required for recycling water but also enhances more water recovery from the wastewater solutions. Another company which we have funded is Clean Aged Resources which again Singapore based company having operation in Asia. So they are offering wastewater recycling as a service in a board basis for 1015 year contract. So these two are two different business models, but targeting a similar way of supporting industries to become more resilient. So I, I feel this is a, a classic example of how private sector based investment could add to adaptation and mitigation benefits. Thank you, Sathish, I, I, I asked for one, but I got 2, which is great. That's David was right in that sense. So, but I also like, I mean, you, you threw a curveball there at the end. I mean there, there also can be a clear alignment with mitigation finance as well. Obviously, it requires a lot of energy for for that industry. So thank you, Sathish. And now that we've involved Sathish, let's go back to David because I want to dig a bit deeper into this. And also, I mean, we've heard two example from emerging markets. Why, why is adaptation, adaptation especially relevant for emerging markets? No, Robert, I think that's a, it's a great question. It's also a key question discussion at the COP as we as we've seen, I think there are two angles I'd like to highlight. The 1st is an equity and a fairness angle, let's say because emerging markets, developing markets have contributed the least to the climate crisis that we're seeing today. And yet in many ways that are the most exposed, right. So the urgency of capital is highest in these markets, and yet they were the ones that contributed least to this crisis. And then second, I think there's an opportunity perspective as well, an opportunity angle. And here's what you look at too much. Any trend, be it demographics, economic growth, urbanization, industrialization, the evolution of food systems, you see that things are picking up at a rapid pace in emerging markets and therefore the need for capital to come in and ensure that those trajectories move towards more stable adaptive green trajectories is urgent. So I think there is a there is a massive need for capital in in this space. And as I was, as I was saying in my first response to your question, each country is different. You know, their countries have different technical potential with regard to solar, hydro, wind power, but they also have different needs with regard to food systems. What kind of investments need to be promoted to increase resilience to the relevant local hazards? So. Every country is different, but the need is, is, is high everywhere. But I think those are fair points. And I think that's also why the general understanding or say perception out of adaptation finances that is perceived to be in the purview of the public sector. So we have two examples from the private sector, but what role does or, or can the private sector take a big role in adaptation finance? No, absolutely. I think that's, that's the other key question. And I think this is really a big misconception to some degree. I'd say it's a big misconception that adaptation is the domain of the public sector and mitigation is the domain of the private sector. Actually, the need for and, and the commercial viability of a resilient or adaptive investments is high right now. When we think about adaptation, it's important to separate different kinds of adaptive investments. 1 is the kind of **** that will ensure that rising rivers don't flood a city, right? That is unlikely going to be funded by a cap by a private enterprise that's some Republic municipality that's going to make that investment. And I think when people think adaptation, they think that, right. However, every person, every company, every SME, every corporate living and working and operating in our, in our, a world today is exposed to climate hazards. That's just a reality. And these climate hazards are getting worse. And there are financially viable, commercially viable investments that individuals and companies can make today that will reduce their vulnerability to these risks. And what's important is that these investments make financial sense, right? If you are living near a flood zone and you have a, if you're building developer and you're constructing a new, a new residential complex, for example, you need to understand whether that complex is going to be in a flood zone, right? And you should try to avoid that. And if it is and if it's not possible to avoid that, then you need to make sure you have an elevated foundation, right? Yes, there is additional CapEx that comes as a result of these of this thinking, but it protects the viability of that business of that building to operate and the continuity there is the crucial win. So I'd say both have a role to play. That's a little bit thinking at the on the ground level, but I think also when it comes to investors, we really need private capital to to enter the space. Public capital can play a very important role in sort of de risking fund structures and providing comfort on on financial flows and sort of de sort of catalyzing development in a sector. But the private sector is crucial if we're going to scale this and if we're going to actually achieve any meaningful benefits over the long run. Thank you, David. I mean, when you, when you put it that way, it does make a lot of sense as an asset manager to look beyond mitigation not only for the opportunity, but also to close the adaptation funding gap. Perhaps what capacity building is, is is needed and why doing so is something which would be a big question. And I, I would think, I think that that question would be good if I asked Sathish and you are when we spoke prior, you speak a lot about capacity, Sathish. I presume adaptation fin finance requires a certain capacity. Perhaps you can elaborate on this and what capacity responsAbility as a asset manager or impact asset manager has developed over time. Sure. So, so just take a step back, right. So for for to ensure the private capital flow to climate investments in emerging markets, you need a good strategy and equally important is also a good capacity, right. So like how it is like responsAbility, like asset managers. So this is our early realization in the process. When we started to scale our climate finance portfolio 10 years back, we realized climate finance is not about lender borrow relation, it's about partnership. And for us to build a partnership, you need to have capacity in the form of team who understands the market, who understands technology and more importantly, the team who is closer to the investee companies and they're someone who can understand the challenges the investors are facing in scaling climate investments. And this is exactly we realized early on in the process when we started building an in house team, the team which I lead, which is called Global Climate advisory specialist. The team brings an expertise across multiple technologies, multiple sectors and the team works with the investors on the ground to ensure these climate strategies are implemented. So this early realization of building an in house capacity helped us to scale our climate finance investments. And we also leverage this in house capacity to develop new strategies because for us to develop new strategies, we need on the ground market insights on what is the need in the market and what strategies we could develop. So we leverage this capacity to build new strategies. Now coming to adaptation, right? So here capacity is more and more important, right? So as David mentioned, mitigation is a global phenom for global phenomena, right? So where everyone is contributing to this global phenomena. When it comes to adaptation, it's very location specific, right? So each one, each location has a different vulnerabilities they're exposed to. So here, the biggest challenge in adaptation finance is the lack of awareness around the vulnerability, climate vulnerability people are exposed today and also in the future. So this is the biggest gap and what type of strategies that you could implement to become more adaptive to these vulnerabilities. So for us, it is as we, we already done it for mitigation and we, we do it in a similar way in terms of building our in house capacity. So that we could leverage this in house capacity to help build capacity of the investors companies to help them understand the vulnerabilities they're exposed to this for the specific region and help them develop strategies. And we can channel our investments to address towards those strategies. To, to give an example, we've expanded our investment data into climate smart agriculture. So we have a strategy which focus climate and agriculture. So now we also have experts who have worked in the climate and agriculture sector for over a period of 5-10 years and they are in our team who helps invest these companies to understand the climate risk and help them develop adaptation strategies. So this is already a natural extension that we have done and we, we realized that it is a country's process and we continue to build our capacity. So that we are, we are always geared up to support our investors and investments. So summary capacity building is really critical. Well, thank you, Sathish. And I like, I see your passion towards this and you really seem to enjoy your, your job and especially the, the partnership part. I mean, a borrower lender relationship is, is always not the, the way forward. So I, I really thank you for that input. And perhaps, I mean looking at time, I think we have time for another case study perhaps Sathish, if you want to probably you covered water, perhaps agriculture is something which we would also think about when we speak about adaptation. Sure. Yeah, No, definitely happy to. So agriculture is a sector where they are severely impacted by climate change, but they're also significant contributed to the climate change, right. So they are in the middle stuck with both foods and there are many strategies which are available to address climate risk and also mitigation in agrical sector. They would already covered on irrigation, right? Drip irrigation. So irrigation consumes a lot of energy also, right? So when you have drip irrigation, it adds to reduced water consumption, reduce energy for pumping and also in enhanced productivity oral increasing the resilience of the farm. But another example interesting example is agroforestry in agriculture practices. So agroforestry is a practice where we people integrate trees in the farming system. So when you integrate trees in the farming system from a mitigation perspective, trees absorb sea water from the atmosphere and stores it in the stem and also in the soil, thereby adding to the sequestration benefits. And trees also enhances the soil fertility, right. So because there's biomass from the trees leaves it, it adds to the soil and they're reducing the amount of nitrogen fertilizers application there again, reducing the impact of CO2 equivalent from the from the pumps, from the adaptation perspective, it adds a lot of value because these trees acts as a shade and they act as a wind breaks. So basically they regulate the microclimate of the region. And this is very important, especially in regions where they face extreme heat and drought conditions. And these trees also ensures or enhances the soil retention, water retention. And this is also critical for water skies conditions where they can retain more water during during this extreme conditions. And on top of it, this, this system, agrofore system also adds to the biodiversity, right. So this enhanced the ecosystem balance in the region. So one practice adds to multiple benefits. And again, if you look at agricultural sector, there is no one solution or 1 technology or one practice. It is a combination of practices and all these are proven scientifically. And we continue to explore more of these strategies on the ground. And so this is a classic example of both mitigation and adaptation. And if you look at all the examples, Robert, all these things connecting back to what David mentioned. So adaptation is not just about public sector, large infrastructure, large projects, but you can look at adaptation in each and every investment strategy and especially these sectors like water, agriculture that are opportunities that the private sector could actually play a role. And that's what we see as a definitely. Yeah. And I mean, you said multiple. I mean, those are I can list couple of different. I mean, agroforestry seems to be the the solution to, to climb it. But I guess it's not easy adaptable to every location. It's great that I'm in Sweden. There's a lot of trees. So I guess we're good in a way. But I mean, that sounds quite interesting. It does. And I mean with that looking at time, I think we should perhaps look at some questions. One question which we have received is let's see if we're taking the right. Yeah, this is an interesting one. How, how can you attract investors to adaptation projects? I think that is key really isn't it? So David, maybe you want to give a go. You're a deputy head of a, of a large fund as well. So no, I think it's AI think it's a, it's a, it's a great question. And look, when you look at an investor, when you, when you're designing a fund, you have to have, you might have different tolerances in terms of risk, in terms of return expectations. So one thing is to really think closely about what kind of investor am I trying to bring into this fund? Public investors might have really a priority on the on the impact and on the catalyzing effect that those fundings that that funding is going to have. And private in sector investors might be a little more risk averse, right? So one thing is designing a fund that makes sense and works and aligns the incentives of both. The second thing is, is really ensuring you have a clear pitch, right? You have a clear narrative for what your capital that you're raising is going to achieve. And this is where I've often seen sometimes adaptation oriented strategies fail is that they can be a little bit nebulous, a little bit clouded with regard to what are you actually going to invest in with regards to adaptation. How are you going to measure the impact of that adaptive investment and how can you really convince me that these investments are going to be commercially viable, that the risk adjusted return makes sense? And I think if you focus on those three questions and you focus on aligning investor interests, I think you can really succeed in raising capital. OK, well, it's, it's good to hear. I think, I mean, as Maria alluded to, we need all the prior capital we can get as well. So that that's, that's good to hear. I mean, I, I would like to dig more into how you would measure adaptation. I think that's a interesting you, you touched upon it. Yeah, you want to take that. It's, I think it's one of the more fascinating parts of the of the discussion because when you look at mitigation, you have a an indicator, usually it's carbon, it's GHG emissions that are saved and for many institutions 20% is the threshold. But when you look at adaptation, the KPIs vary, right. It can be water saved, it can be number of resilient buildings financed. It can be something more sophisticated like loss avoided, right, So climate risk related loss avoided as a result of the CapEx investment. What's true here isn't and it's true with what we said at the beginning, there's no one-size-fits-all. There's no single KPI that is relevant to every investor, relevant to every project. So we have to really design A set of KPIs that are sensible, that are feasible to implement and that are meaningful for for both people on the ground and investors. Sounds fair. I mean, there's no CO2 emissions saved really. Perhaps maybe that could be one. Maybe. Yeah, that's mitigation. Definitely. Yeah, sure. Great. We have another question here from the from the listeners and it's regarding this person has been at a sustainable finance course in in Varadam and he's or or that this person also says that impact EC finance is becoming that almost all finance would be impact finance. Now do you think this is a more general question I guess, but do you think it increases the chances of greenwashing? What steps are taken in the sector to preserve the credentials? Yeah, I think the, the, the fact is that market is also moving, right. So we see a lot of these asset managers also come up with the strategies. So that is also a fact that you see a lot of climate focused funds in the market compared to 5-6 years back. You see a more and more climate focused fund that is also more from the market demand perspective. There's more and more climate funds or ESD funds coming into the market and you see, but there is also increased chance of these greenwashing because then you you have more competition in the market. But also you see people claim to have climate focused or EST focused, but in terms of the reality, the implementation part will be missing completely when it comes to these strategies. So for us, I think we are always clear right from the beginning and our strategy is not about claims, our strategy is about implementation. That's exactly what I mentioned as a partnership approach because we are very closer to the investors on the ground and our impacts are not measured by Excel sheets, tick marks. Our impacts are measured on the ground by working closely with the investor companies because we build a lot of capacities, right? So we build capacities, we help them grow and we grow with these investors. So far as it's very clear on our approach. But on the broad market level, there are also global taxonomy getting developed, EU as a taxonomy. But we also see, because EU taxonomy is more EU specific, but we also see each of the markets, emerging markets also they are building their own taxonomy and that, that will be the way to go in terms of addressing these local claims towards climate EST. And I, I think that is, that is an interesting question. And, and the person who asked that question, you're, you're, you're free to reach out to us afterwards as well, because that's a, that could be a whole session itself really. So please reach out afterwards. There's another question which just popped up and I'm happy that question came up because when I'm at conferences, not only on adaptation, but also on mitigation and other climate actions is about scaling. And the question here in particular is how can we scale adaptation projects and which regions are leading the way. Perhaps if you would like, maybe not focus it only on adaptation, but perhaps on on mitigation maybe. I mean, you mentioned biodiversity. So yes, an initial stab. No, I think that I think in order to scale two things. I mean, when you're, when you're investing in emerging markets, you have several barriers that we kind of forget about in in the global North, right? Awareness is often low, supply chains are often lacking. So you might think, yeah, but solar is everywhere. Why is it so difficult to set up a solar project? It might be because since there isn't complete absence of awareness on the on the risks of solar, financial systems are ready to finance them. And there might also not be a supply chain ready to fix the panels or replace, replace things as things breakdown and solar is now quite mainstream. But it's an easy example because that applies across the value chain in mitigation, renewable energy, energy efficiency awareness, supply chain and just the number of successful cases in a country generally are quite low. So what we have to do is increase the, the awareness is develop the ecosystem. So this is where Sathish's team and, and, and is, is so crucial because both on the investment side, but then also on the advisory side, we work with our partners on the ground to help them understand the ecosystem, help them understand the key challenges so that they feel comfortable taking those first steps in the new investment strategy. Because for many of them, it's often new. And then once you have that initial runway, think of a plane taking off, right? It takes a little bit of speed before you really can, can, can get off the ground. That's when then when things start to, to, to work on their own. And I'd say similar narrative applies to adaptation. You know, I think here the challenges are even more significant because you're at an earlier stage and many of these markets awareness is even lower. There is this misperception that it's only for the public sector and there is really a lack of, of a sense of what the, what the suitable. And Sathish nailed it when he said, you know, what is the actual climate risk and should I really invest this much CapEx today to mitigate a risk that we're uncertain about tomorrow. And that's the knowledge we have to bring, that's the awareness we have to bring. We have to develop positive pilot cases and on those pilot cases we can scale the strategy. So we've done it before in several markets and I think it's it's something that we look to to continue doing. Here's a direct question to you actually. Can we can we speed the spending of money pledged from COP? Yeah, thank you. It's a very hard, that's a hard one because this is always been, it's recognized already since many years that, that even when climate finance is there, it doesn't, it's not mobilized at the speed that we would like. And, and why not? It's, it's, there's several factors at, at scale in terms of, of speeding up and scaling up and some of which have just been discussed in terms of the, the high risk context and the capacity issues sometimes from both sides, investors and investees. Now I'd say the money pledged from COP will not have the an issue of how much. We can, we can mobilize. It's also a gradual increase until 2035. And but I think in general, what we're talking about is to have really a smarter use of the existing concessional finance to mobilize the private finance and learning from the lessons of the last decade. So that it's not just an increase in the number in the amount of concessional finance, but how different instruments from guarantee to any kind of risk, risk reducing instrument can better mobilize the private finance. And lately there's also been discussions on on how the the spending needs to be diverted from the climate, induce climate change inducing investments. That's another way to make investments in climate change mitigation and adaptation more attractive to investors is to make the others less attractive. That's an also a great solution for the for the speed question, which is not honestly, we know it's not the only question it's also about effectiveness and. And yeah, an impact, yeah, we have a timeline. So it's, it's good that we could speed things up and it's, it's great that there's a lot of solutions. It's just we, we, we need to implement them as well. So that's, it's a tough cookie in that sense. It is for sure. I think we have time for a final question from from the listeners and then we'll we'll wrap things up. I think this one is really directed to you, Sathish. How do you see the compatibility of emerging market taxonomies with the EU taxonomy? Yeah, sure. So as I mentioned, so EU taxonomy is a great starting point for the European market, right. And that already is helping a lot of these European investors to have a clarity on these strategies being deployed in within the Europe. But when you take this taxonomy to the emerging markets, there's definitely a, a, a big challenge in implementing EU specific regulations in the emerging markets. And that is one of the key reason why there are local governments developing their own text on me. Obviously it will be aligned with you text name, but they will customize it with the local recommends because there's local regulations and local context because there is a lot of investment aspects to it and there is a lot of implementation aspects to it. So we see the way way forward is this each of these market developed their own taxonomy and then they are played across their boundaries and then most of and then gradually move towards the global taxonomy requirements and that's how we see the market moving. OK, Yeah, thank you for that. Good. I think perhaps we should ask, I would like to ask the Panel 1 final question, but just in one sentence, try to be very brief what you would like the listeners should take away if they should take away one thing from today's seminar. Maria, perhaps you want to start. Yes. So I have two closing thoughts. One is, let's remember when we are in the finance discussion, the the more abstract discussion that really the finance tries action on the ground. I'm sorry, that might sound obvious, but it's that when we discuss how much and how fast this really influences how ambitious and how hopeful we can be about about addressing climate change. And the other parting thought would from me would be that despite the big numbers that I cited, 1 trillion / 1 trillion per year, that apart from it not being actually such a big share of global GDP and, and less than is spent in other sectors, it's also far less, far less than what it will cost us, if we can even calculate it to face the, the worst extremes of climate change. That's, that's, that's, that's good takeaways. So it's good that you took 2, David. Yeah, I think 2 short and sweet ones. I think the first one is collaboration is paramount. So when you're addressing a problem like the climate crisis, that's multi, there's multiple issues at once. You need many minds, you need many perspectives and a lot of experience. So don't approach it just from a financing angle. Don't approach it just from an engineering angle, not just an ESG angle. It's everything together. That's the first thing. And the second thing is, yeah, stay optimistic because I think these days there's a lot of a lot of doom and goom. And if we don't, if we don't find a way forward, then yeah. Just just to add, there's all because we had one final question which I didn't get asked. What makes you optimistic? Oh, that's a longer question. Well, but for, I'll say it quickly, I'll say it quickly. It's having people like Sathish and Maria that I can work with every day and see that if you have different minds and different perspectives together, you can actually achieve tangible change. So that makes me optimistic. That's great. That's great. Sathish, can you top that? Yeah, yes. So in fact, they've already addressed it. So because we, we believe in this approach of this collaboration partnership, right. So, and I think for that you need mindset shift at both levels, at the asset managers level, right, to understand it is important to have this in house capacity so that you can look at investments from the right perspective and leverage this capacity to help investees build strategies to address their climate concerns. So mindset shift with the partnership approach is, is the key take away from my perspective. I think that's a great note to, to end today's session. I think partnership, collaboration, I, I really like, like those words. And I would really like to, to thank you the panelists, Maria Sathish, David, I mean, it's been a really interesting session. You've shared a lot of expertise and experience. Please, please reach out listeners if you have any more questions afterwards. And thank you listeners for for all these questions. So these are really, really good questions as well. And there's obviously much more questions which we also face. So please reach out afterwards as well. And feel free to follow us on, on LinkedIn or on on YouTube. We have a lot of great content there as well. We also now have a podcast series, Voices of Impact Investing. So finally, I would like to wish everyone a wonderful day. And let's remember that in order to fight climate change, apart from collaboration, we cannot only focus on mitigation or adaptation. We have to do both. Thank you very much. Hi everyone. Thank you.