A phenomenon that was once termed an illusion by many is now being fully embraced after realizing the dire effects the world will face if it continues unabated. An increasing realization also appreciates the benefits that come with trying to mitigate and adapt to this catastrophe.
As with any catastrophe, opportunities arise and it is to those who come up with ways to address the problem to harness the opportunities and benefit from them. An example is that of the Covid-19 pandemic. In 2020 and 2021 most people successfully supported their families from selling Covid-19 protective clothing and equipment. Similarly, with climate change, following the different mechanisms that have been put in place internationally to address this phenomenon, developing countries have been presented with an opportunity to benefit from availability of funds to address climate change and other related matters.
Most of these mechanisms were developed following the Kyoto Protocol, which came into force in 2005. An example is that of the Clean Development Mechanism (CDM) which also funds the UNFCCC’s Adaptation Fund from the 2% levy on its Certified Emission Reductions. The mechanism allows industrialised and developed countries to fund GHG emission reduction projects in developing countries, whilst they benefit by claiming saved emissions under their own efforts.
The Adaptation fund was formed to finance programmes and projects in developing countries ratified to the Kyoto Protocol and are vulnerable to severe effects of climate change (Mori, et al., 2019) such as Mozambique, South Africa and Zimbabwe. The 2015 Paris Agreement also seeks to ensure mobilisation for funding for the implementation of mitigation and adaption projects in all parts of the world including the developing countries.
Climate finance has become one of the most topical issues in the field of finance and business sustainability. To date there are a number of climate financing platforms that have been created including private facilities and these include the Green Climate Fund, the Adaptation Fund, the Global Environmental Facility and the Global Climate Change Alliance. This has given rise to a number of opportunities and has stirred a remarkable amount of interest in the field of finance and business management. The once not understood field of environmental management is now one of the most sought after fields to incorporate in business to ensure all cards are put on the table in terms of business sustainability.
Opportunities have arisen in the financial sector to handle and manage climate funds which is good business for these institutions, thus inciting their interest in climate chance. Most banks and financial institutions are slowly creating a climate finance and sustainability department and are incorporating climate action in their main agenda so as to create room for climate change related issues, build their knowledge on the matter, concientise the organization and see how best they can navigate the climate action arena through the climate finance route. This has created a lot of job opportunities and has also bridged the gap between financiers and environmental scientists. Environmental experts are now taking up positions in financial institutions to manage the climate finance and sustainability departments. The formation of multidisciplinary teams working under one roof to achieve the same goal, working on concept notes and project development and management has been noted. Financiers can now be heard talking about climate change whilst environmental scientists now have a full understanding of the different possible financing opportunities that can be applicable to different projects and their returns, pros and cons.
This is true for Zimbabwe where the Infrastructural Development Bank of Zimbabwe (IDBZ) was one of the first banks to embrace this concept by developing a climate finance department that has contributed immensely in the development and support of a number of climate mitigation and adaptation projects in the country. The bank also worked to attain its GCF accreditation which is paving way for the development of its Climate Finance Facility. Other financial institutions such as FBC Bank and Steward Bank have developed their climate finance departments and are working towards accreditation for climate financing platforms as well as on climate finance related projects.
Whilst embracing SDG 13 on climate action. This is also paving way for SDGs 9, 11 and 17 on industry, innovation and infrastructure; sustainable cities and communities; and partnership for the goals.
