COP28: The role of the private sector in climate change mitigation innovation

This article was written by Lauren Cross (Senior Analyst)

As the world grapples with the pressing challenges of climate change, technological innovation has been heralded as essential to mitigating disaster. The recent 28th Conference of the Parties (COP28) dedicated a large portion of time to discussing the role of technology and innovation, both on a broad level - with talks including ‘The role of the private sector, innovation and technology in the first Global Stocktake’, and ‘Accelerating Climate Innovation on the Road to Net Zero’ - along with deep dives on specific technologies, such as those supporting agricultural advancements and tailored artificial intelligence.

In this article, we will be taking a broader look at the central role of technological innovation within climate change, discussing the role of the private sector as well as the pivotal need for transparency in this space.

The private sector's role in climate innovation: Transparency

Unlocking private investment for climate change mitigation is essential. Mr. Badr Jafar, a keynote speaker during COP28 talks and CEO of Crescent Enterprises, highlighted the tens of trillions of dollars required to meet climate goals - a mammoth task for public funding alone. Private investment will be essential for furthering research, development, and implementation of technologies to reduce and sequester damaging greenhouse gas emissions.

At COP28, large corporates like Google and 3M discussed climate action through innovation, citing projects like Google’s Green Light, where AI is used to reduce emissions from stop-and-start driving at traffic lights, currently operational in 12 cities and growing in number.

Another leading example is Microsoft - their position as a massive buyer in the Carbon Capture and Storage (CCS) technologies space gives unique insights into the current deficiencies in this emerging area, such as the limited supply and high costs of high-durability solutions. Microsoft stand out due to their transparency on the matter - publishing an annual white paper on the successes, challenges and lessons learned in CCS, such as a lack of common definitions and standards across this growing field (organisations are currently working in isolation and methodology for tracking outcomes varies). Sharing these valuable insights and working towards solutions - in the case of lacking consistency: by advocating for standardisation and entering into discussions with governments - paves the way for others looking to implement solutions. As a large buyer in CCS, Microsoft recognise the importance of collaboration and shared learnings as an essential step to help the world move as quickly as possible toward climate solutions.

Transparency from large corporates who have the resources to take risks is vital, as it helps others follow with reduced risk. Larger companies, with more capacity for risk-taking, can share insights on new processes and technologies, benefiting the entire ecosystem of interested companies in implementing climate mitigation solutions without bearing the full risk burden.

Dr. Gayle Schueller emphasised the importance of cross-pollination and knowledge sharing at COP28, highlighting that breakthroughs require collaboration, and that large scale climate solutions - as with any major advancement - are a culmination of small innovations coming together. Dr Schueller uses the example of touch screen phones, an invention that required the convergence of countless smaller innovations including the gorilla glass, touch technology, and mobile phones, all compounding to create what we use today. It is this sharing of knowledge and the culmination of ideas that are key to advancing climate mitigation technologies.

Jim Coulter, Chairman of TPG Rise Climate, cited the inefficiency of independent work, having seen multiple battery companies working on the same technologies but in silos, stressing the inefficiencies in funding, time and expertise. A collaborative effort would propel the private sector toward climate change solutions at a much more rapid rate.

Paving the way for SMEs

While larger companies like Microsoft can leverage extensive resources for R&D, innovation and piloting new technologies/processes, smaller companies with limited budgets and reach face a less obvious path to propel progress in this space. Although they may not spearhead technological advancements, such businesses can still take various actions to advance mitigation efforts:

• Be a ‘fast follower’ – although small-to-medium-sized enterprises may not have the ability to lead the movement, they can make attempts to be ‘fast followers’. This can be achieved by implementing new technology once it is established and more readily available to markets.
• Explore government incentives – there are grants and credits available for businesses who adopt green technology. Researching these benefits can alleviate the resource burden of adoption and implementation of novel technologies, systems and processes.
• Centre sustainable thinking across the business – green innovation shouldn’t be restricted to the ESG department, but a central aspect to all employees’ jobs.
  Sustainability goals should be common knowledge across the business, and employees should feel empowered to suggest improvements in their ways of working. Incentivising meaningful work and suggestions can get employees engaged. Not only does this benefit the business through increased sustainability, but also improves retentions rates. Research has shown that 74% of employees find their job is more fulfilling when they’re given the chance to make a positive impact on social and environmental issues, and 70% of respondents stated they are more likely to be loyal to the company when given these opportunities.

While tech-based climate solutions were prominent at COP28, it's crucial to view them as supplemental to (and not overshadow) the essential emissions reduction actions needed today.