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Lindsey Hall: I'm Lindsey Hall, Head of thought leadership at S&P Global Sustainable1.   

Esther Whieldon: And I'm Esther Whieldon, a senior writer on the Sustainable1 Thought Leadership Team   

Lindsey Hall: Welcome to ESG Insider, a podcast hosted by S&P Global, where we explore environmental, social and governance issues that are shaping investor activity and company strategy. 

Esther Whieldon: Welcome to our special series of on-the-ground coverage from COP28.

Lindsey Hall: That's right. I'm here in Dubai, where I'm conducting interviews on the sidelines of the UN Climate Change Conference, known as COP. Over the past few episodes, we've been covering some of the big themes coming out of COP28, like the role of partnerships ijn creating solutions to climate change. We've also been covering another cross-cutting theme on the COP28 agenda, and that's the role of finance that we kicked off with the day dedicated to finance. 

And I've been sitting in on a lot of discussions about what needs to happen to plug the climate funding gap. One early COP development, generating a lot of buzz is around loss and damage, several countries and the EU pledged more than $420 million to a new loss and damage fund to assist countries particularly vulnerable to the effects of climate change, and many people are heralding this as an early success for COP28 negotiations. 

Well, in today's episode, I'm speaking to someone working across many different groups of stakeholders in the public and private sector to tackle the issue of climate finance. Dame Susan Rice chairs the Global Steering Group of the Global Ethical Finance Initiative, or GEFI. GEFI is a nonprofit focused on working with the financial sector to deliver finance for the UN’s Sustainable Development Goals, or SDGs. And it describes itself as the partner for action on ethical finance

Dame Susan has had an illustrious career spanning medical research, higher education and banking. To give you just a couple of highlights from her long resume — she was the first woman to head a U.K. Clearing Bank as Chief Executive and Chair of Lloyds TSB Scotland. She also served as Managing Director of Lloyds Banking Group, and she was previously a non-Executive Director of the Bank of England. She was made a name of the British Empire in recognition of her contribution to the banking industry.

And in the interview, Dame Susan talks about what needs to happen to get finance flowing to Climate Solutions, the role of hybrid solutions, and her hopes for COP28 outcomes. Okay. Here she is.

Dame Susan Rice: Thank you. Very nice to meet you. Very nice to be here. So if I were to give you any details from my CV, you wouldn't want that because it's so dense, but let me just summarize a career, which is working in 3 industries, in 3 sectors, in 3 countries. So a bit of diversity there, but with some themes that have run through it, which themes have been around economic regeneration around the disadvantaged and improving things for them, and around climate and climate change. So that's been a theme whatever I've done. 

I'm here as Chair of the Global Ethical Finance Initiative, GEFI, which is a small organization with a global reach. We've been running a, what we call a campaign to CAP28, which is finance-based. So it's working through summits, through products, through convening voices. We've done that in the U.K. We've done that in ASEAN countries. We've done that here several times now in Dubai. And that's really why I'm here. It's all about how do you bring finance and activate it in the space of the green transition.

Lindsey Hall: Yes, absolutely. Finance is obviously a cross-cutting theme here at COP28. And what you're referring to is something that also came up in one of my recent podcast interviews with the CFO of the Green Climate Fund — just this question of like how do you activate the finance that's needed to address these big challenges. What are you hoping for here at COP28? What are you going to see happen?

Dame Susan Rice: So I think I'm hoping, and we at GEFI, are hoping for what a lot of other people are, which is, quite honestly, more action, more delivery, more of today and less of promises for tomorrow. It takes a lot of time and a lot of effort and a lot of diplomacy to bring together lots of countries and get a common way forward. 

But the time has come because of urgency and because of knowledge that we need to just get going. So I'm very heartened by the positive sound of the opening few days of the speeches and the conversations at COP. But what I would like to see is that there's a recognition that one can't just keep promising targets and achievements for tomorrow. If we don't ever get started now, we will never get there tomorrow.

Lindsey Hall: That makes a lot of sense. And I guess what do you see as the biggest hurdle to that action actually taking place?

Dame Susan Rice: So I think there has been and continues to be a really big hurdle getting the money to the investment. I hear all the time There's a lot of money out there, but it can't actually get to the other side as it were. And there are reasons for that, partly because a lot of this change is at the frontier —companies, organizations, governments doing changes, which haven't been done before. So if you're an investor, if you're a banker, you don't understand the risk. You can't monetize the risk and you become cautious and don't put the money in. 

So what I would love to see is really creative, creative but sound, prudent finance but still creative. So hybrid finance. So as an example, if there's a project and one investor can't fund all of it, because it's just too much and it's too unknown, then two investors get together, but they are great to judge on the same basis so that the investee, the recipient of the fund, doesn't have a difficult time. There's a way to phase government money and private sector money. There are a lot of things that can be done, but the real challenge is being creative about this finance.

Lindsey Hall: Okay. Have you seen examples of that creativity playing out?

Dame Susan Rice: So I've seen examples in a very different context altogether. So some years ago, I was working in America and with what was called real estate finance or project finance responsibility. But I went into hugely disadvantaged communities where it was impossible for any bank to lend money to build up a building that was just decrepit. 

You couldn't put money in these communities because there was no inherent value. And I worked out with some colleagues ways to -- again, as I use the phrase, working at the frontier to make the loan in a different way than one normally did and structure things differently, and then went to the regulator then and said, this is what we're doing, and let us do it. And eventually, when you go and ask that often enough, they said, "Yes." 

What is amazing to me, so it's a different subject. But acute some of the most -- the most impoverished communities in America at the time, some projects that were built that created jobs, that involved engaging people locally from the communities and all the work, these 20 years later are still thriving. And for me, that's a real mark of success, I think. It's something that one can say, yes, you just have to go about it differently, but go about it. Don't just sit back and think about it.

Lindsey Hall: Okay. So you've seen that it can happen just it needs that sort of thinking outside the box approach. Okay. So I understand you just a few hours ago, arrived here in Dubai. Can you tell me a little bit more about what conversations you're expecting to have or GEFI is expecting to have?

Dame Susan Rice: So Jeff so half the world call us GEFI and have the world call us GEFI. But anyway, GEFI has several programs of its own. So tomorrow, we have a summit, which is financing survival, we call it. We have quite a few registered attendees Tuesday, we have a product launch related to Islamic finance and a summit around Islamic Finance and the North-South Nexus as it were. And then we have a day of what we call an SDG Hive, a series of very 1-hour sessions with real experts talking about things. Jeff calls itself not a think tank. We call ourselves a think and do tank. And it's the due part that I'm really hoping that we see more of here.

Lindsey Hall: When it comes to getting the right stakeholders under the -- or at the table for the conversations that need to happen. Who are those stakeholders? One thing we've been talking about a lot is that the big private sector presence here at this cup, for example, like what stakeholders need to be in these conversations?

Dame Susan Rice: Well, I think it really is all sectors. So typically at COP and certainly COPs gone by. It's the predominance of the not for profit ...  sector and obviously, governments and so forth. 

COP26 was the first time that finance played a pretty central role, was really important, and that has now really sort of been embedded into COP28 because finance, as you said before, is a theme that goes right through. And that's primarily private sector organizations.

I think the point is that governments know and we all understand that governments don't have enough money to solve this problem on their own. They can't do it. So the private sector has to be involved. And I'm one for including everyone around the table and not say, "We'll do it and we'll get the credit." Let's say "get everybody around the table and make it happen."

Lindsey Hall: Okay. You mentioned previous COPs. What do you expect from this cut compared to previous COPs that you into?

Dame Susan Rice: Gosh, that's a hard question to answer, but I sort of listened to the President of this cup, in his opening speech. It was confident. It was ambitious, and it was basically, if we promise, we deliver — I'm paraphrasing — and an agreement for instance, of the agenda items that sometimes takes days at a COP, that happened really quickly. So there's almost an expectation that things will just -- the pace will pick up here. And so I'm really hopeful that's the case.

Lindsey Hall: You mentioned the North-South divide. And that's another thing that came up day 1 of the conference, is this commitment from several countries to the loss and damage fund. What's your reaction to that?

Dame Susan Rice: So I will reprise the issues that sit behind all of this. I just think there's a nuanced conversation to be had. So yes, the more developed parts of the world, which tend to be Northern Hemisphere countries have contributed more and made their wealth of the use and the creation of fossil fuels. 

But when you speak to countries in the Southern Hemisphere, it's not just that they say give us money, and we'll do something. I think you have to be really sensitive to where they are in their development. So we've worked with sort of the African Development Bank in GEFI and others. And they will sit there and say, we built a coal-fired energy plant some years ago, it employs huge numbers of people. If we just close that down, we put all these people out of jobs. We hurt the economy and then where are we. So there's something about you can't just have the end goal. You have to have a real path for them. It's not just about the money. It's about working with countries that are starting at different points to get their best trajectory forward.

Lindsey Hall: So we've got a big day ahead. You're one of the speakers at the S&P Global event that's starting here in just a little while, and I'll be emceeing that event. Before we go, is there anything I haven't asked about that you think is important for our listeners to understand is they're trying to get a sense of what's at stake here at COP?

Dame Susan Rice: You've had some very good questions because they've allowed me to come back and say that it's urgency and its action today that really matters. So in GEFI, we've had a partnership with the DIFC, which is the International Financial Center here in Dubai in running our campaign to -- at to cup 28, as we call it. And we've been working with pension providers, banks, governments, family offices, working across the piece. And I think, again, there's a sense of just including everybody, everyone should be around the table. So, in the world of finance, we've been trying to do that. And I just think that's really important, a really good fundamental.

Lindsey Hall: Okay. And last question for you, Dame Susan. Is there anything that you think would make this COP a success?

Dame Susan Rice: I think having some genuine plans that have near-term targets, not just promises for tomorrow, but promises for today and how we will get to tomorrow. That's the difference between this potentially and other COPs, which are also often about the future.

Lindsey Hall: So we heard today about some of the hurdles in getting the financial sector to invest in climate solutions. And I wanted to know how are bankers thinking about this issue? Well, we'll be hearing more about that topic in our next episode. When I sit down at COP28 with the Chief Sustainability Officer of the UAE's largest bank.

Esther Whieldon: Thanks for listening to our special series about COP28. We'll be back with more interviews from Dubai and upcoming episodes, so please stay tuned.

Lindsey Hall: Thanks so much for listening to this episode of ESG Insider and a special thanks to our producer, Kyle Cangialosi. Please be sure to subscribe to our podcast and sign up for our weekly newsletter, ESG Insider. See you next time.   

This piece was published by S&P Global Sustainable1, a part of S&P Global.     

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