The United Nations’ corporate sustainability chief has warned business leaders they can no longer ignore the growing “north-south divide” on climate change.
Sanda Ojiambo, CEO and executive director of the UN Global Compact — a body responsible for overseeing business commitments to achieve the Sustainable Development Goals — told CNBC’s Steve Sedgewick that “climate has become a political issue,” describing the divide between rich and poor nations as “the greatest gulf”.
Speaking on a CNBC panel discussing the challenges and opportunities for businesses in pursuing net-zero climate goals at the World Economic Forum in Davos, Switzerland, the UN chief warned that divisions between the global north and global south have created a “tension in global level” among both business and policy makers.
“You can’t ignore it no matter where you are in the world,” she said.
Climate talks at the COP29 summit in Baku, Azerbaijan, in November ended in acrimony, with developing countries left unimpressed by the rich world’s financial commitments.
Global South leaders and activists at the climate summit were left outraged by a $300 billion financial deal, a paltry commitment compared to the $1.3 trillion needed for climate adaptation.
At one point, delegates from poor countries and small islands walked away disappointed at what they called a lack of inclusion, worried that fossil fuel-producing nations were seeking to water down aspects of the deal.
Ojiambo warned of the consequences of divisions and tensions over climate finance.
Sanda Ojiambo, CEO and executive director of the United Nations Global Compact.
Leigh Vogel | Getty Images Entertainment | Getty Images
“It stifles adequate capital flow, it stifles technology exchange, it’s broken trust,” she said, warning business leaders that they “cannot ignore politics” and must instead “work within it.”
Strengthening public-private partnerships with “affordable capital” for businesses in the “global south” is vital to healing “a broken world”, the UN chief added.
The global south’s “anxiety and anguish” is due to producing “the least amount of emissions” while being “most affected by climate action”, Ojiambo said.
Climate scientists warn that rising sea levels, frequent cyclones and food insecurity are an existential threat to small island developing nations in the Caribbean and Pacific.
A 1.5 C rise in global average temperatures would intensify the extreme floods and droughts already experienced in Africa, home to 32 of the world’s 48 least developed countries.
Both the scientific warnings and the divisions have brought the world to a “tipping point”, Ojiambo added.
A report published by the UN in 2023 found that G20 countries are responsible for 76% of global emissions.
“If we can get a significant amount of big players to get us to where we need to be in terms of those objectives, that’s one part. And then we can work on the rest,” she told the Davos panel. .
Opportunity to invest in ‘gender lenses’
Gender gaps can be a great opportunity for business leaders to achieve sustainability goals.
Katherine Garrett-Cox, CEO of GIB Asset Management and chair of CDP Worldwide, a global nonprofit, said businesses need to apply a “gender lens” to unlock finance.
“Typically, women-led businesses are more concerned about this topic,” she said, adding that improved investment “would be important.”
“Gender lens investing is still very new,” Garrett-Cox said.
According to the gender finance network 2X Global, gender lens investing accounted for almost $8 billion in private market investment in 2023.