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Consilium Capital Senior Adviser Authors New Report on Climate Finance

A new report from finance think-tank Investor Watch analyses the risks but also the opportunities in financing the country plans for climate actions after the Paris COP.  Known as Intended Nationally Determined Contributions or INDCs, these plans have been submitted by almost every country in the lead-up to Paris. Viewed as a major step forward – but also a radical departure from previous “top down” attempts to direct climate change actions – the INDCs now put the responsibility for developing, financing and implementing “contributions” to combatting climate change on nation states.

The report, written by former investment banker and development finance expert Ian Callaghan, a Senior Adviser to Consilium Capital, samples a range of INDCs and presents a pragmatic approach to their future use as a basis for creating climate finance deal-flow.

To enable this deal-flow arising from the INDCs, the key conclusions of the report are that:

 – The significant dataset in the INDCs represent a one-off opportunity to create a uniform categorisation of practical climate actions, both mitigation and adaptation. Such a categorisation will radically improve the collection, analysis and use of climate finance data, which currently suffers from significant gaps that prevent progress

– The INDCs themselves should be worked on further to create “Climate Investment Plans” (CIPs) at a country level. The outputs of these CIPs should be investable financial transactions, whether based on concessional or commercial finance, or a mixture of the two.

The report underlies a “Call to Action” on climate finance by  eight highly respected organisations in the field, including Ceres, the UN PRI, Carbon Tracker and the Climate Bonds Initiative. The Call to Action can be found at www.calltoactiononclimatefinance.net . As well as reflecting the conclusions of the report, the Call to Action proposes the creation of a transaction-oriented network designed to strengthen the infrastructure of the climate finance sector.

Author Ian Callaghan said that the report reflected a decade at the “coal face” of development finance and impact investing.  “There are easy wins in climate finance, such as energy efficiency in developed countries, and those are already starting to have a positive impact on carbon intensity.  But something well in excess of $300 billion is going to be needed every year for more difficult investments in developing economies.  This investments present challenges, but also opportunities for investors if they can be presented with well structured and bankable deals.  This is the objective of the “Call to Action” which the report underlies.”

Read/download the report