< Previous30 CEO MIDDLE EAST DECEMBER 2023 s world leaders gear up to converge in Dubai this week for COP28, expectations are high that this year’s climate conference will move beyond dialogue to deliver concrete plans and commitments to tackle the climate crisis. The inclusion of oil and gas com- panies for the first time signifies the importance of bringing all stakeholders to the table. However, after a “disap- pointing” outcome at COP27 last year, experts are questioning whether COP28 can reinvigorate global climate progress through meaningful action. One such expert is Emrah Durusut, Senior Partner at global ESG consult- ing firm Xynteo who believes COP27 was “hampered by all number of chal- lenges and the watered-down results were a disappointment, not just to the majority of delegates, but for people and communities around the world.” With only a few days to go until COP28 convenes in Dubai, pressures mount on leaders to turn intentions into impact after ‘disappointing’ COP27 outcome COP28: PRESSURE MOUNTS FOR MEANINGFUL CLIMATE ACTION AFTER COP27’S ‘DISAPPOINTING’ OUTCOME SUSTAINABILITY BY TALA MICHEL ISSA ASUSTAINABILITY DECEMBER 2023 CEO MIDDLE EAST 31 “IF COP28 CAN’T GET US BACK ON TRACK, THEN THE WHOLE PROCESS HAS THE CAPACITY TO DEGENERATE INTO JUST A GLORIFIED TALKING STOP” Extending COP26 to include busi- ness in the conference was initially seen as a “gamechanger” but COP27 showed that “this optimism was over- stated,” he added. “If COP28 can’t get us back on track, then the whole process has the capacity to degenerate into just a glorified talking stop,” said Durusut. The UN climate conference, being held in the Middle East for the second consecutive year, will welcome over 70,000 visitors from all corners of the globe, including heads of state and industry leaders. COP28 will begin on Thursday and run until December 12. With only a few days to go, Arabian Business spoke to experts who will be in attendance to gauge their expectations for the event, key areas for immediate ac- tion, and what a successful COP will look like – in their view. quired to rapidly scale up, reduce costs and increase efficiencies as well as accelerate the pace of co-development towards a net zero carbon economy,” he said, adding that even established technologies “are not scaling up and diffusing fast enough to shift towards a net zero-emissions trajectory.” Therefore, rapid scaling of solu- tions through investments and part- nerships will be paramount to address- ing the challenge. The importance of collaboration is a sentiment shared by most experts attending the conference. Rasha Al Madfai, Acting Director of the Environmental Awareness Dev- lopment Department, Environmental Information, Science, and Outreach Management at Abu Dhabi’s Environ- ment Agency (EAD), said that COP28 will foster collaboration, empower youth and accelerate the transition towards a sustainable future. Initiatives like EAD’s sustainability education hubs and youth programmes can amplify voices driving change, which Al Madfai revealed the Agency will be pushing throughout the 13-day climate conference. Youth will play an integral part in the world’s climate struggle as they are the guardians of our planet’s future who will monitor progress being made and help ensure goals continue to be approached over the long-run. Early education and a deep understanding of the challenges facing the planet’s fu- ture will ensure that they will eventu- ally actualise the UN’s strategic vision for strategic development and guide future environmental stewardship. Time is running out to avoid cata- strophic climate impacts, the experts warned. As Durusut said, “short-term priorities for economies and busi- nesses around the world will only create larger problems in (the much nearer) future.” If leaders continue prioritising short-term gains over ur- gent emission cuts, even more severe consequences will follow. Key areas for action at COP28 “As the world converges at COP28 to confront the urgent challenges of climate change, we are reminded of the collective responsibility we share to safeguard our planet for future genera- tions,” CEO of enviro-tech company Dendra Systems, Dr. Susan Graham, told Arabian Business. “COP28’s emphasis on four cross-cutting themes – Technology and Innovation; Inclusion; Frontline Communities; and Finance – under- scores the comprehensive approach required to tackle the root causes of climate change and manage its far- reaching impacts.” COP28 is a platform to advance an integrated energy vision, to break down barriers so that net zero technology can be scaled rapidly, and to help each country participating to recognise the diverse paths they must take in their net zero transi- tion, according to Luca Corradi, CTO of non-profit organisation Net Zero Technology Centre. He emphasised the need to “ac- celerate the pace of co-development towards a net zero carbon economy.” “Many of the energy transition technologies needed to limit the global temperature rise already exist. But it is well documented that more effort is re-SUSTAINABILITY 32 CEO MIDDLE EAST DECEMBER 2023 COP28 also represents a com- mercial opportunity worth trillions. “Achieving global net-zero requires $3-5 trillion investment per annum… for several decades so this is also one of the greatest commercial opportuni- ties of our lifetime,” he added. Pro- gressive nations and companies taking bold action now will find themselves positioned for future growth. Where COP27 fell short COP27 fell short of meeting some of its key commitments, according to several reports. “It lacked the clarity of direction and collaborative commitment from all parties which we now need to see,” said Durusut. Last year’s conference aimed to raise green finance to support countries most vulnerable to climate change, however pledged funds from rich nations have remained unevenly allocated and below the $100 billion by 2020 goal, according to the Brussels International Centre (BIC), a non- profit climate-focused thinktank. Only $83 billion was provided with just 25 percent was delivered in 2020 with just 25 percent for adaptation. It is within this context that COP27 failed, leaving key commit- ments from Glasgow’s COP26 un- fulfilled. A key outcome was setting up frameworks to reform financing systems and ease developing nation access to green funds, recognising only 20 percent of renewable investments currently reach low- and middle- income states. Some proposals to leverage over $500 billion privately were mentioned.SUSTAINABILITY DECEMBER 2023 CEO MIDDLE EAST 33 However, the conference did an- nounce the UN Secretary-General’s $3.1 billion plan to expand early warning systems in developing regions by 2027, a crucial step as 60 percent of Africa cur- rently lacks such adaptation measures. COP27’s biggest win, however, was a breakthrough agreement to provide loss and damage funding for vulner- able countries hit hard by natural disasters. This was seen as a historic decision because countries recognised the need for finance to respond to such catastrophic effects of climate change for the very first time. A UN report released earlier this month found that national climate plans remain insufficient to limit global warming to 1.5°C. While some countries are increasing efforts, much more urgent action is needed this dec- ade to sharply reduce emissions as per the latest science. COP28 is seen as critical for coun- tries to regain momentum on ambi- tious climate action with the conclu- sion of the first Global Stocktake. This year’s conference aims to take stock of progress made by different countries on the landmark 2015 Paris Agreement to identify gaps and find ways to accelerate action. Expectations for COP28 and a successful outcome After over 15 years working on climate, Durusut remains “optimistic” but knows “pace and scale in our global transition” must increase. “This year it is even more im- portant that COP deliver practical action plans to match its ambition and narrative. Each year the call for action becomes more urgent, and the gap be- tween words and actions grows wider. With the global stocktake of national emissions taking place this year, there is a real sense that we are losing the opportunity for genuine transforma- tion,” he said. The inclusion of oil and gas busi- nesses for the first time presents an opportunity to “act seriously” on accel- erating the global net zero transition. “The level of ambition and com- mitment of national oil companies (NOCs) and their nations will affect the pace of transition.” However, Corradi said that a suc- cessful COP28 would involve “active en- gagement in addressing climate change” through fostering “profound insights and connections for impactful change.” Graham concurred, viewing collab- oration as key to addressing “climate challenges [through] joint endeavours leveraging technology and innovation.” Clear plans, investment schedules, implementation milestones and ac- countability will determine if COP28 moves from words to impact, according to experts energised yet wary after past disappointments. The conference’s success may influence not only our climate future, but the very credibility of the UN process itself. “THIS YEAR IT IS EVEN MORE IMPORTANT THAT COP DELIVER PRACTICAL ACTION PLANS TO MATCH ITS AMBITION AND NARRATIVE”34 CEO MIDDLE EAST DECEMBER 2023 geing is an inevitable jour- ney we all embark on, and the quality of that journey matters as much as its duration. With significant advances in medical science extending our lifespans, we must ensure that our later years are marked by good health, vitality, and overall well-being. The World Health Organization’s projection of a threefold increase in the population aged 80 and above by 2050 has brought the concept of ‘healthspan’ to the forefront of global healthcare discussions. In the UAE, where only 1 percent of the population was over 60 years old in 2016, this figure is expected to reach two million people, or 16 percent of the population, by 2050. This shift highlights the growing importance of discussions about longevity, particularly in terms of health and functioning in the socio- economic landscape. To support an ageing popula- tion, the healthcare sector and policymakers must work together to create a supportive ecosystem. The UAE has proactively cared for this growing demographic by embracing data and analytics and establishing a robust framework to facilitate ad- vanced medical care from caregivers and organisations. However, as we grapple with the re- alities of a changing climate, we must also consider the increased vulnerabil- ity of older adults to climate-related health risks. With the UAE preparing to host the COP28 conference this year, the timing couldn’t be any better to focus on this correlation. In fact, the United Nations Decade of Healthy Aging (2021–2030), a global initiative aligned with the Sus- tainable Development Goals, aims to improve the lives of older people and their communities by raising aware- ness of the impact of evolving weather patterns and advocating for better health outcomes. Exploring the connection between ageing and climate change NURTURING A GREENER, HEALTHIER FUTURE SUSTAINABILITY BY DR. CRAIG COOK, CEO, DP WORLD’S AVIV CLINICS DUBAI ASUSTAINABILITY DECEMBER 2023 CEO MIDDLE EAST 35 “WE MUST BRIDGE THE GAP BETWEEN OUR DESIRE FOR LONGER LIFESPANS AND THE URGENT NEED TO PROTECT AGEING CITIZENS/ RESIDENTS FROM THE GROWING CHALLENGES POSED BY CLIMATE CHANGE” The UN is focused on raising aware- ness about the impact of rising tem- peratures and extreme heat on body temperatures, leading to dehydration, cardiovascular strain, and increased risks for older adults. This is especially signifi- cant here in the Middle East. Further- more, air pollution is a major contributor to climate change. Over 90 percent of the world’s population is exposed to unhealthy levels of air pollution. This combination of factors, includ- ing heat, temperature fluctuations, poor air quality, and pollution, exacer- bates health problems in older people, especially those with pre-existing car- diovascular and respiratory conditions. So, when considering the intersec- tion of healthy ageing and climate change, addressing vulnerabilities and implementing public health interven- tions should go hand in hand. Ageing begins as early as 30, yet the effects typically become noticeable by the age of 50. During biological ageing, our bodies gradually lose efficiency in channelling oxygen to sustain energy production and healing. This decline is accompanied by a slowdown in bod- ily functions and cognitive faculties, manifesting as diminished memory, reduced focus, slower information processing, and a general decline in mental and physical performance. Aviv Clinics Dubai, part of the DP World network, takes a comprehensive approach to addressing the challenges of healthy ageing. Its advanced clinical capabilities combine cutting-edge medical expertise, personalised treat- ments, and state-of-the-art technol- ogy to improve cognitive and physical function in older adults. This approach aligns with the goal of achieving a high-quality healthspan, recognising that true progress involves enabling individuals to lead fulfilling, functional lives as they age, making them less vulnerable to the effects of climate- related health issues and strengthening their bodies’ resilience against climate change pressures. The interplay between healthy age- ing and climate change is a compel- ling narrative that calls us to unite and create a brighter, sustainable future. A crucial aspect of this effort is consistently raising awareness about the connection between these two phenomena and advocating for specialised care within the healthcare sector to address the unique needs of this growing demographic. Addi- tionally, there is a pressing need for preventive care that prepares bodies to adapt to external changes. We must bridge the gap between our desire for longer lifespans and the urgent need to protect ageing citizens/ residents from the growing challenges posed by climate change. The goal should be to establish a world where everyone can thrive in the face of climate change, ensuring a legacy of health and well-being. 36 CEO MIDDLE EAST DECEMBER 2023 ncreasing global tempera- tures have highlighted the urgent need to address climate change. With record-breaking heatwaves and extreme weather events becoming more frequent, the conse- quences of climate change are undeni- ably impacting our world. Climate change is an investment risk that demands the attention of in- vestors. The events unfolding globally - from the devastating wildfires ravaging both the United States and Southern Europe to the heart-wrenching flash floods in Bangladesh – highlight the direct impact of climate risk on our economies, societies, and portfolios. Physical climate risk refers to eco- nomic costs and financial loss associ- ated with a changing climate. Acute physical risk drivers include increased frequency or severity of climate and weather events (e.g., floods, wildfires, tropical storms, etc.). Chronic physical risk drivers include more gradual shifts in climate such as rising sea levels and persistent changes in levels of pre- cipitation or ambient temperatures. These climate change induced events can result in an array of catastrophic impacts on human life as well as physi- cal damage to property, supply chain disruptions and scarcity of key inputs. Extreme weather is a cause of global productivity concern. Understanding the Impact of rising temperatures on productivity Research conducted by climate sci- entists and economists has revealed a correlation between economic pro- ductivity and changes in temperature. While lower temperatures can enhance productivity, there is an optimal an- nual average temperature of 13 degrees Celsius beyond which productivity declines rapidly. It is no surprise then that whilst global population is evenly distributed between temperate and tropical countries, much of global GDP is clustered around this optimum Research conducted by climate scientists and economists has revealed a correlation between economic productivity and changes in temperature COUNTDOWN TO COP: CONSIDERING IMPLICATIONS OF CLIMATE CHANGE SUSTAINABILITY BY STEVEN REES, GLOBAL INVESTMENT SPECIALIST FOR THE MIDDLE EAST AT JP MORGAN PRIVATE BANK ISUSTAINABILITY DECEMBER 2023 CEO MIDDLE EAST 37 “IT IS CLEAR THAT NEW AND INNOVATIVE SOLUTIONS WILL BE NEEDED TO HELP COMPANIES AND COUNTRIES TO MOVE TOWARDS LESS CARBON- INTENSIVE WAYS OF DOING BUSINESS” temperature. Rising ambient term- peratures therefore may begin to affect economic growth as countries move closer or further away from this “ideal” temperature zone. The UN Intergovernmental Panel on Climate Change (IPCC), respon- sible for advancing scientific knowl- edge about climate change caused by human activities has adopted climate scenarios, known as Representative Concentration Pathways (RCPs), to assess the potential impact of climate change based on future carbon emis- sions. Analysts estimate that in the RCP 4.5 scenario, an intermediate scenario where emissions peak around 2040 before declining, global GDP could decline by 4 percent, with lower and lower-middle-income countries experiencing significantly greater losses compared to their wealthier counterparts. The intensifying risks faced by regions like South Asia, where GDP losses of 10-18 percent are pro- jected by 2050, emphasise the need for a nuanced understanding of the finan- cial implications of climate change. Global efforts are driving change Governments and companies world- wide have recognised the urgency of decarbonisation, committing trillions of dollars to achieve net-zero green- house gas emissions by 2050. Ahead of the UN Climate Change Conference (COP28), the Saudi Green Initiative programme has set a goal to reduce carbon emissions by over 278 million tonnes per year and achieve 50 percent power generation capac- ity from renewables by the year 2030, contributing to the national target of net zero emissions by 2060. The United Arab Emirates (UAE) has also committed to achieving net zero emissions by 2050, the first country in the Middle East to do so, through a mix of reducing flaring of natural gas, increasing energy efficien- cy and deploying clean energy solu- tions. Last year, the UAE and United technological innovation are respond- ing to this demand, presenting an opportunity for investors to participate in this “clean revolution”. There are a variety of ways to gain exposure to these trends. But investors need to act fast. The number of public market funds investing in climate has ac- celerated from fewer than 200 in 2018 to about 1,400 as of June 2023. This includes both climate transition funds, investing in companies that are adapting their business models to a lower carbon future, as well as clean energy funds that are directly investing in sectors of the economy providing cleaner solutions. Assets have grown 30 percent in the last 18 months fueled by investor interest in Europe, China and the United States. Private equity investments in climate-oriented sectors has also seen remarkable growth. The global volume of climate-oriented equity transactions is estimated to have surged by 2.5 times, rising from approximately $75 billion in 2019 to reach $196 billion in 2022. This growth has been particularly notable in areas like power, transportation, hydro- gen, and carbon management. As the world re-calibrates, there will be winners and losers so it is im- portant to get expert advice in order to identify investments that can help pro- mote sustainable outcomes whilst gen- erating healthy returns for investors. It also requires an active approach from fund managers, using their knowledge and skill to navigate the complexities of this evolving landscape. As temperatures continue to rise, it is imperative that we act swiftly to ad- dress the challenges posed by climate change. By seizing the opportuni- ties presented by investing in climate solutions, we can create a resilient and sustainable world for future genera- tions. This way individuals can open avenues to a sustainable tomorrow, where investments aren’t just vehicles for growth, but catalysts for change. States signed a $100 billion agreement to deploy 100 gigawatts of clean energy by 2035. Expectations are high for COP28, hosted by the UAE this year, as world leaders come together to take stock at the half way point for the Paris Agreement and the critical 2030 target year for a decline in emissions. Stepping Up: Opportunities for investors It is clear that new and innovative solutions will be needed to help com- panies and countries to move towards less carbon-intensive ways of doing business. Across sectors and geogra- phies, scientific breakthroughs and 38 CEO MIDDLE EAST DECEMBER 2023 here was a time when business innovation was considered top secret and the preserve only of the C-suite and super geeks. Closely guarded organi- sational IP that was dispensed on a very much need-to-know basis. Trade secrets still exist, of course, but in an era of inclusivity, innova- tion has been devolved. In gradually opening up and expanding channels of communication through technol- ogy and travel and changing business cultures, ideas are being spawned from all company corners and it’s a hugely influential factor in the prod- Ideas are being spawned from all company corners and it’s a hugely infl uential factor in the products hitting the market today WHY WE ARE LIVING THROUGH A PERIOD OF R&D GENESIS TECHNOLOGY BY JOE BAGULEY, VP & CTO, VMWARE TTECHNOLOGY DECEMBER 2023 CEO MIDDLE EAST 39 ucts hitting the market today. Production for consumption Simply building better products and services for customers is no longer sufficient. Businesses are expected to link ideas, information, technologies, and services - all while maintaining a customer-first and business-first perspective. This is putting huge onus on innovation and the need to not only create products and services to match these expectations, but to continually better them in a cycle of self-improvement. So much so that we are living through a period of R&D genesis. The internet is awash with stats and studies on the importance of innovation. But here’s one - 22 percent of global executives say that not having enough great ideas is one of the biggest obstacles to innova- tion ROI. That’s almost one in four businesses that are crying out for sources of inspiration. But anyone can have an idea. That’s the beauty and the beast in this dichotomy. The challenge for businesses is to unlock it, weave it into R&D and actually produce something for mainstream consumption. In fact, in one of our own studies with Professor Feng LI, Chair of Information Management at Bayes Business School at City, Uni- versity of London, Innovating in the Exponential Economy, revealed that an inability to turn ideas into new products, services and strategies, at pace, continues to put organisations at risk of failure. The poster boy for possibility No surprise that, if asked to give the best example of modern innovation, most people would point to Steve Jobs. The iPhone is the poster boy for possibility simply because it was so different, so brilliantly simple in its concept and now so ubiquitous. There’s also recency bias, of course. But because it set the bar so high, it’s easy to be blinded by the sleek black finish and ignore (almost) equally impressive developments happening in businesses around the world. Businesses have always had to challenge the status quo to get ahead. It’s why the most successful at do- ing so are so revered - Ford, Buffett, Bezos and Musk to name a few. This never-ending drive for improvement is why we’re seeing such incredible investment into R&D in the race to get ahead and stay there. At VMware, we put around 22 percent of revenue back into R&D and have always been and always hope to be a disruptive innovator, a co-innovator with our partners, and a sustainable innovator. But innovation needs more than money. To turn an idea into some- thing tangible, it needs an environ- ment to thrive. A major metric for business success Our own annual RADIO (Research & Development Innovation Offsite) event is a good example - most tech- nology companies have something similar these days. Led by our CTO, “BUT INNOVATION NEEDS MORE THAN MONEY. TO TURN AN IDEA INTO SOMETHING TANGIBLE, IT NEEDS AN ENVIRONMENT TO THRIVE”Next >