Mohammed Alardhi is the executive chairman of Investcorp and the chairman of Sohar International Bank
January 19, 2023
The most important takeaway from Cop27, held in Egypt this past November, is that all stakeholders – politicians, multilateral organisations and the private sector – must come together to tackle the climate crisis with greater urgency and direction. As we begin 2023 and start preparing for Cop28, due to be held in the UAE later this year, I hope every entity maintains its sense of obligation towards climate goals and finds solutions that are effective, innovative and collaborative in nature.
We must not lose sight of the broader picture – currently much of the activity and planning in the global community is directed towards climate change mitigation, whereas adaptation is just as critical. The UN Environment Programme Adaptation Gap Report 2022 states that international adaptation finance flows to developing countries are five to 10 times below what is needed – with the gap continuing to widen.
With adaptation being vital but underfunded, and in the context of the new loss and damage fund that is being set up after Cop27, how can the investment community deliver greater impact in this area, and what will drive them to invest?
At the UAE Government Meeting in November 2022, Sheikh Mohammed bin Rashid said the hosting of Cop28 will be the UAE's biggest event next year. Photos: Wam
Cop28 will be the first time countries will assess the progress of the 2015 Paris climate accord to limit global warming.
The global event, which will take place at Expo City Dubai, will welcome more than 140 heads of state and government and 80,000 participants.
Dr Sultan Al Jaber, Minister of Industry and Advanced Technology, Special Envoy for Climate Change and chairman of Masdar, gave a presentation at the meeting outlining what will be involved in hosting one of the largest global events of the year.
The UAE has led the way in climate adaptation – the most impactful measures include expanding blue carbon ecosystems by planting 100 million mangrove seedlings by 2030, adopting new climate-smart agricultural methods and committing greater resources to promoting sustainable production and consumption patterns. Their work is undoubtedly impressive but in order to see a global impact we need to see global change.
Climate adaptation measures must be rolled out in every country as soon as possible. The Bank of America has estimated that the climate adaptation market will be worth $2 trillion a year by 2025, and the Global Commission on Adaptation has argued that the rate of return from investing in resilience will be high. They estimated that investing $1.8tn in five areas – early warning systems, climate-resilient infrastructure, improved dryland agriculture crop production, global mangrove protection, and investments in making water resources more resilient – could return $7.1tn in total net benefits by 2030. On the other hand, the opportunity cost of failing to invest in adaptation could run into trillions of dollars.
Dr Mahmoud Mohieldin, the UN climate change high-level champion for Egypt, highlighted this when he noted that the "race to resilience" is as important as the race to net zero, and that partnerships between private and public sector organisations must be strengthened in order to make real progress.
Private equity firms have the monetary means as well as networks to get the ball rolling. The industry is currently estimated to have $6.3tn in assets under management with $2tn under what we refer to as "dry powder", that is capital that has been committed but not yet allocated. This, in addition to the strong influence private equity firms have over their portfolio companies, makes them well-positioned to invest in the long term and make the impact the world truly needs.
Businesses and investors can help devise and provide the products, services and business models that will help locally led adaptation efforts, but galvanising the size of investment needed calls for well-structured blended finance models, and a real coalition of investors, politicians, multilaterals and central banks to come together and support countries’ National Adaptation Plans.
The UAE and the US are investing in Egypt's renewable energy sector. Reuters
There are numerous examples of private equity investments in business with a clear mission for sustainability. At Investcorp, we invested in Fresh to Home in 2020 – this business enables sellers to directly source from fishermen and farmers through its AI-powered supply chain and reduces food waste for suppliers to less than 2 per cent versus an estimated 15 per cent in traditional unorganised markets.
Reducing food waste is critical to adaptation. Investors are increasingly interested in diversifying portfolios, due to the increased focus on ESG within institutional investors, changing demographics at the heads of family offices, and the huge amounts of capital going into energy transition plans. Once the size of the potential returns is recognised, and it is better understood and articulated that adaptation investments can offset climate risk across the rest of a portfolio, investments in adaptation will increase.
If any nation can serve as a benchmark for success in this area, it is the UAE in its Cop28 year.
The UAE has made numerous breakthroughs around climate within its own territory, and now has the greatest platform to export this knowledge. As well as its adaptation efforts, according to the Green Fuel Index, the UAE has increased its renewable energy capacity more than any other country in the world over the past decades. The country has $50 billion in clean energy projects in 70 nations across six continents.
In November, the UAE and the US agreed to invest $100 billion to deploy 100 gigawatts of clean energy by 2035, and at Cop27, they announced a joint-venture to build a 10GW onshore wind farm in Egypt capable of offsetting 23.8 million tonnes of carbon dioxide. The nation has demonstrated that it can deliver meaningful change from blue carbon sinks to district cooling to renewables, from adaptation to mitigation.
The UAE can ensure that Cop28 becomes a pivotal event for all nations, as it helps them reassess investment priorities, examine the green economy as a whole, and have a broader sense of the full spectrum of opportunities.
The internal combustion engine is facing a watershed moment – major manufacturer Volvo is to stop producing petroleum-powered vehicles by 2021 and countries in Europe, including the UK, have vowed to ban their sale before 2040. The National takes a look at the story of one of the most successful technologies of the last 100 years and how it has impacted life in the UAE.
The insured employee may still file an ILOE claim even if a labour dispute is ongoing post termination, but the insurer may suspend or reject payment, until the courts resolve the dispute, especially if the reason for termination is contested. The outcome of the labour court proceedings can directly affect eligibility.
Nigel Farage told Reform's annual conference that the party will proscribe the Muslim Brotherhood if he becomes Prime Minister. "We will stop dangerous organisations with links to terrorism operating in our country," he said. "Quite why we've been so gutless about this – both Labour and Conservative – I don't know. “All across the Middle East, countries have banned and proscribed the Muslim Brotherhood as a dangerous organisation. We will do the very same.” It is 10 years since a ground-breaking report into the Muslim Brotherhood by Sir John Jenkins. Among the former diplomat's findings was an assessment that “the use of extreme violence in the pursuit of the perfect Islamic society” has “never been institutionally disowned” by the movement. The prime minister at the time, David Cameron, who commissioned the report, said membership or association with the Muslim Brotherhood was a "possible indicator of extremism" but it would not be banned.
Favourite road trip: My first trip to Kazakhstan-Kyrgyzstan. The desert they have over there is different and the language made it a bit more challenging.
Favourite spot in the UAE: Al Dhafra. It’s unique, natural, inaccessible, unspoilt.
126: The length in metres of the legs supporting the structure
1 football pitch: The length of each permanent spoke is longer than a professional soccer pitch
16 A380 Airbuses: The equivalent weight of the wheel rim.
9,000 tonnes: The amount of steel used to construct the project.
5 tonnes: The weight of each permanent spoke that is holding the wheel rim in place
192: The amount of cable wires used to create the wheel. They measure a distance of 2,4000km in total, the equivalent of the distance between Dubai and Cairo.
The burning issue
The internal combustion engine is facing a watershed moment – major manufacturer Volvo is to stop producing petroleum-powered vehicles by 2021 and countries in Europe, including the UK, have vowed to ban their sale before 2040. The National takes a look at the story of one of the most successful technologies of the last 100 years and how it has impacted life in the UAE.
Thursday:
Hatta v Al Jazira, 4.55pm
Al Wasl v Dibba, 7.45pm
Friday:
Al Dhafra v Al Nasr, 5.05pm
Shabab Al Ahli Dubai v Al Wahda, 7.45pm
Saturday:
Ajman v Emirates, 4.55pm
Al Ain v Sharjah, 7.45pm
The alternatives
• Founded in 2014, Telr is a payment aggregator and gateway with an office in Silicon Oasis. It’s e-commerce entry plan costs Dh349 monthly (plus VAT). QR codes direct customers to an online payment page and merchants can generate payments through messaging apps.
• Business Bay’s Pallapay claims 40,000-plus active merchants who can invoice customers and receive payment by card. Fees range from 1.99 per cent plus Dh1 per transaction depending on payment method and location, such as online or via UAE mobile.
• Tap started in May 2013 in Kuwait, allowing Middle East businesses to bill, accept, receive and make payments online “easier, faster and smoother” via goSell and goCollect. It supports more than 10,000 merchants. Monthly fees range from US$65-100, plus card charges of 2.75-3.75 per cent and Dh1.2 per sale.
• 2checkout’s “all-in-one payment gateway and merchant account” accepts payments in 200-plus markets for 2.4-3.9 per cent, plus a Dh1.2-Dh1.8 currency conversion charge. The US provider processes online shop and mobile transactions and has 17,000-plus active digital commerce users.
• PayPal is probably the best-known online goods payment method - usually used for eBay purchases - but can be used to receive funds, providing everyone’s signed up. Costs from 2.9 per cent plus Dh1.2 per transaction.
The internal combustion engine is facing a watershed moment – major manufacturer Volvo is to stop producing petroleum-powered vehicles by 2021 and countries in Europe, including the UK, have vowed to ban their sale before 2040. The National takes a look at the story of one of the most successful technologies of the last 100 years and how it has impacted life in the UAE.
