Strengthening the Front Lines in the Fight Against Climate Change: A Call for Investment in Coastal Communities’ Resilience
Today the UN Sustainable Development Goals (SDG) 2023 Summit gets under way in New York. This summit coincides with and is part of Climate Week NYC 2023.
There are good reasons for the alignment between the two events. The SDG Summit is an attempt to provide a lodestar for humanity to navigate the interrelated and urgent crises the world is facing. And climate change is arguably the gravest crisis the world has ever seen — and one that impacts countless other global challenges, from poverty to hunger.
This year, these discussions are happening at the end of the hottest summer on record — a time when sweltering temperatures on land and sea, combined with widespread droughts and wildfires, have reminded policymakers and indeed everyone across the world of the desperate need to accelerate progress towards climate action and the other SDGs.
The location of these events also has symbolic significance. Coastal communities, like those north and south of New York City, are on the first line of defence against climate change. Coastal communities around the world bear the brunt of nature’s fury, whether that involves hurricanes, rising sea-levels resulting in flooding and erosion, vast amounts of seaweed (sargassum) washing ashore on beaches, or other climate change-related impacts. Coastal communities in the least developed countries are among the most vulnerable to these escalating impacts, as they do not have funds to build hard coastal infrastructure like sea walls and breakwaters to protect themselves. This precarious situation calls for a strategic rapid response.
I am strongly committed to channeling public and private capital towards transformative community-based projects in developing countries — including the coastal communities on the front lines of the climate crisis. Through my daily work as Managing Director at both Palladium and Bamboo Capital Partners (Palladium’s asset management arm), my central mission is to create a tangible impact while contributing to both environmental sustainability and socio-economic growth.
Palladium operates in over 90 countries, and in our work with these communities, what strikes me most is the role of social resilience, i.e., the capacity of communities to respond, recover and adapt to adverse situations. A focus on building social resilience is no longer an option in the age of climate change; it is a necessity for the survival and growth of these communities, and one that applies to at-risk groups worldwide.
But building resilience does not happen in a vacuum. It requires investment, not just in projects or businesses, but also in education, infrastructure, technology and social systems. And it requires funders to go beyond the traditional focus on making individual impact investments in various, unrelated projects to embrace a more strategic approach that directs public and private capital towards projects that generate social and environmental impact along with financial returns.
Given the scope of the climate crisis, it is crucial to mobilise and deploy different types of capital into projects that build climate resilience in the least developed countries around the world. But though this crisis has rightly been elevated to the forefront of the global development conversation, we can’t lose sight of the huge and interrelated challenges of feeding, clothing and housing the world’s growing population, while creating sustainable economic activity in the developing world.
Blue-green resilience investments represent one emerging approach to achieving these overlapping goals. A relatively nascent yet promising area of impact investing, these investments are focused on restoring and preserving coastal ecosystems while also bolstering the social fabric of these frontline communities. Their goal is to nurture both the “blue” (oceans, seas and coasts) and the “green” (land, forests and agriculture) in a way that not only sustains life but also propels it forward.
Nature-based solutions are at the heart of these blue-green resilience investments. By harnessing the power of natural solutions that have evolved over millions of years to survive extreme weather and other threats, we can help strengthen the resilience of at-risk communities. These solutions include restoring mangrove forests, which act as natural barriers against sea-level rise and storm surges while promoting sustainable agriculture that improves food security and generates economic growth.
Palladium has been working for almost 60 years with our partners and clients to mobilise capital and implement projects that have lasting positive social, environmental and economic impact. And since its inception in 2007, Bamboo Capital Partners has raised US $450 million and invested in more than 30 developing countries. But even though we positively impact millions of lives each year, our efforts are just a drop in the ocean. The scale and urgency of the challenges that these coastal communities face require global collective action. The financing gap to achieve the SDGs in developing countries is estimated to be US $2.5 trillion per year. If we still hope to achieve the SDGs by 2030, more innovative and sustainable financing solutions are required. As investors, policymakers, community leaders and individual contributors, we must all rally behind this cause.
It is our responsibility to ensure that the funding flowing to climate resilience continues to grow. We must work together to generate a rising tide of public and private investments, and to make sure that the resilience these funds build truly does lift all boats — including those in the least developed countries. As this summer’s climate-related disasters illustrate — and this week’s events in New York will surely emphasize — our time is running out.
Photo courtesy of Carsten ten Brink.