“I’m passionate that climate should be central to CDC's strategy in the next five years,” says Amil-Lee Amin, Director of Climate Strategy at CDC (formerly the Commonwealth Development Corporation).
The UK development finance institution has investments in over 1,200 businesses in emerging economies with total net assets of £6.5bn. It is the largest impact investor in Africa.
Amin is looking at the impact of climate change across CDC's entire portfolio. “I’m looking at how CDC can increase investments in projects that fight climate change,” she tells Impact Investor.
She is herself a scientist. At an early stage she says she “realised increasing access to energy for the poor in a way which did not affect the climate would be the major priority for the planet in my lifetime.”
She became passionate about this issue, abandoned plans to become a doctor, and studied environmental science with a focus on policy. She “decided to be a doctor for the planet instead.”
CDC’s three-pronged climate strategy
CDC’s climate strategy has three prongs to it, Amin explains. Firstly, the implementation of that 2050 net zero goal across the entire portfolio. To this end, she has created a general policy framework with tools to implement a new fossil fuel policy that is in line with the UK Government’s increasingly green strategy. Last year the UK published its ten-point plan for a green industrial revolution, and just this month its strategy for Net Zero by 2050.
Secondly DCD has a commitment to a ‘just transition’ which leaves nobody behind in the new energy economy. And finally, and according to Amin “most importantly, a commitment to improving resilience at a time of climate change.” This last theme is increasingly dominant in CDC’s portfolio.
Amin works with CDC's investment teams to assess every prospective investment from a climate change perspective. She says some projects are ‘no brainers’.
“When it comes to something like renewable energy all teams are very well equipped to assess them and there are no obvious negative energy issues,” she says.
It is some of the more innovative areas, and “particularly the nature-based solutions which are the ones which require input.” Over the last four years, CDC has invested over $1bn in climate finance across Africa and South Asia.
DFIs must engage with investees on climate risk and build resilience
This commitment and focus on resilience comes out clearly in the major research piece Amin recently published: CDC's Emerging Economies Climate Report. Amin was pleased with the level of awareness - 86% of investees said climate change would negatively impact their business over the next decade.
“There is an urgent need for development finance institutions (DFIs) to engage with companies on this agenda.” It also became clear to Amin that what is crucial is “how we could support investees’ [climate] resilience activities – this was the most important conclusion of the report.” 94% of respondents said that the international community has a duty to support emerging economies in responding to climate change.
On resilience, Amin cites CDC’s recent $1bn climate finance investment in India. She says this will “provide services for farmers on climate-related risk using artificial intelligence and sophisticated data.”
Amin believes “resilience must be integrated into every aspect of policy going forwards.” To this end, last November she worked with other DFIs to launch a major resilience initiative and she says that they will make a statement around the COP26 summit.
New multi-billion climate commitment by CDC
Amin is likely to be centre stage at COP26 in Glasgow. CDC will be hosting a major event today at the summit following today's announcement that it will invest over £3bn over the next five years to support emerging economies in Africa and Asia to combat the climate emergency.
CDC claims that this commitments will make the development bank one of the world’s largest climate finance investors in Africa and select South Asian markets.
When she was pressed during her interview with Impact Investor on today's intended statement, she stressed important issues to stimulate climate finance, such as, “what are the relevant tools of measuring resilience, choose important metrics, and elaborate a strategy of DFI co-investment on resilience projects.”
Amin has a crucial role as Senior Advisor to the UK COP26 presidential team, “theoretically for one day a week, but often longer.” She says she is part of the strategy team working across several relevant projects on finance, energy transition and most importantly for her, resilience and nature.
Expectations for COP26
In looking forward to the summit, Amin says she hopes for a clear indication from the developed countries that they will deliver on the $100bn commitment to help the developing countries meet their climate change commitments.
She says given all that is going on with Covid this commitment may not necessarily be fulfilled immediately this year. “But I am hopeful it will be fulfilled in the near future.”
She is also hopeful that there will be movement on NDCs (Nationally Determined Contributions). “Hopefully together the world can get back on track,” she says, admitting that China is a key player.
She salutes Chinese investments in renewable energy and is pleased that they have made commitments to withdraw from the building of coal-fired power stations.
Amin: “One thing that does make me optimistic about China is that most of the government officials involved in the Chinese delegation are scientists. They really ‘get’ climate change.”
Focus on nature
Looking to the future, Amin says she believes that the new focus will be on nature, recognising nature is essential as it relates to resilience to climate change.
She points out re-engineering the structure of cities is a crucial part of this. “Cities can absorb more water and introduce natural cooling, as has happened in Paris.”
One of the other areas highlighted in the recent report is a focus on “green buildings.” In the last two years CDC has been increasingly working with the construction industry on projects’ impact on climate change, Amin notes. Going forward “CDC will only construct appropriately certified ‘green’ buildings.”
Nature is also increasingly becoming part of CDC's investment strategy. Amin cites CDC’s work with Zephyr Power on a nature-based solution in Pakistan to improve climate resilience by planting mangroves.
In measuring the impact for CDC, Earth Security estimated that the project “return(ed) 20 times the value in the protection of physical assets against coastal erosion, saving the project developer and its investors up to $7mn over the project’s 25-year timeframe while doubling the income of local communities.”
“Now, that’s real impact,” Amin concludes.