The Green Economy Forum: Financing The Green Transition, event last week couldn’t have come at a better time. It was held on the day Donald Trump was named President-Elect of the USA, a day I found overwhelming and frankly depressing. The thought of the world’s largest economy once again being led by a fossil-fuel enthusiast and climate change denier was a heavy weight to bear. Yet, this event brought a refreshing wave of optimism and direction—a beacon of hope on an otherwise bleak day.
It’s taken me a few days to sift through my notes, boiling them down into key takeaways. These reflections have sparked new questions and areas of interest—always the hallmark of a thought-provoking experience. Or, as my nine-year-old daughter would say, “mind blown.”
One clear message emerged throughout the event, powerfully bookended by Paul van Zyl in his opening and closing remarks: we are failing to communicate the tangible benefits of the green economy. Despite its promise of more jobs, cleaner cities, and cheaper renewable energy, most people remain disengaged or unaware of these opportunities.
This lack of communication isn’t just an awareness problem—it’s affecting funding. Investors, when allocating resources to green initiatives, need to prioritise interventions with the greatest direct impact while considering secondary benefits, such as:
- Driving economic growth through new industries and jobs
- Reducing flooding risks
- Capturing carbon
- Improving air quality
The Momentum Behind a Green Transition
In his keynote, Nigel Topping shared an encouraging perspective on the forces driving change in the green economy. He pointed to two seismic shifts:
- The Economic Urgency (the Stick):
Evidence of climate change’s devastating impacts is mounting, with recent floods in Valencia serving as a stark reminder. Outdated economic models are being replaced by more realistic ones, showing that a 3°C temperature rise could cause a catastrophic 30% decrease in global GDP. Risks such as uninsurable assets—from farmland to ports—are compelling decision-makers to act. - The Financial Opportunity (the Carrot):
The transition to a green economy offers unprecedented opportunities for innovation. Entire markets are being reshaped as entrepreneurs develop solutions to address the climate crisis. For instance, sectors like aviation and marine—once dismissed as impossible to green—are now making strides that could exponentially accelerate positive change.
Inspiring Examples of Leadership and Innovation
The global shift toward sustainability isn’t just talk; it’s happening in real-time. Leaders from the Global South are stepping up with bold, large-scale solutions. For example:
- Reliance Industries Limited (RIL) is making substantial investments in green energy. The company is developing the Dhirubhai Ambani Green Energy Giga Complex in Jamnagar, Gujarat, which will encompass gigafactories for photovoltaic panels, energy storage, green hydrogen, electrolyzers, and fuel cell systems. This initiative is part of RIL’s strategy to achieve net-zero carbon emissions by 2035.
- At COP29, PT Pupuk Indonesia unveiled a hybrid Green Ammonia production facility, blending natural gas and hydrogen from water electrolysis. This flexible approach hints at a future where ammonia can be produced with minimal carbon impact.
These initiatives reflect the kind of ambitious action required to tackle global challenges and demonstrate what’s possible when innovation meets determination.
Challenges and Opportunities for SMEs
A dedicated panel discussion honed in on the role of SMEs (small and medium-sized enterprises) in the green transition. Facilitated by Guy Ranawake, the conversation revealed both obstacles and solutions for these vital players, which account for 44% of non-household greenhouse gas emissions in the UK.
Obstacles SMEs Face
According to Shevaun Haviland from the British Chamber of Commerce, many SMEs want to reduce emissions but don’t know where to start. Key challenges include:
- Lack of resources or cashflow
- Uncertainty about the right path (e.g., carbon neutrality vs. net zero)
- A mismatch between specific actions (e.g., switching to LED lighting) and broader strategies (e.g., measuring emissions accurately)
Calls for Support and Standardisation
Haviland urged for standardised carbon footprint calculations and broader capability-building initiatives. She highlighted the role of banks, which can help SMEs map their carbon footprints and provide financing for net-zero solutions.
Contrasting Views on Responsibility
Not everyone agreed on the best approach. Hannah Cool from B4NZ argued that SMEs shouldn’t shoulder the full burden of achieving net zero. Instead, corporates should streamline their ESG requirements for suppliers, and governments should incentivise green behaviours (e.g., via credit agency weightings).
The Case for Behavioural Change
Ajaita Shah called for incentivising behaviour change through financial rewards. She argued against punitive measures for SMEs that produce minimal emissions, advocating for support to grow businesses providing green solutions.
Embedding Climate Action in Every Business
Eva-Maria Dimitriadis suggested that all businesses, regardless of size, should see themselves as climate businesses. Reporting greenhouse gas emissions, she argued, should become as standard as disclosing diversity policies.
The Way Forward: Clarity, Collaboration, and Commitment
The nuanced discussions at the event reflected the broader challenges SMEs face in embracing sustainability. Many forward-thinking SMEs want to integrate ESG principles but are held back by:
- A lack of clarity on future policies
- Limited resources to implement solutions
- Concerns about the durability of their efforts given the evolving regulatory landscape
Despite these hurdles, it’s clear that collaboration between governments, corporates, SMEs, and financial institutions is essential to building a sustainable future.
The Green Economy event was a powerful reminder that the journey to sustainability is both urgent and achievable. But we can’t afford to wait. Whether you’re an entrepreneur, a policymaker, or simply someone passionate about the planet, your role matters.
For a deeper understanding and actionable guidance on driving the green economy for SMEs, we’re here to help.
Get in touch: anjuli@sustainablebusinessventures.co.uk