COP27’s finance day offered none of the grand pledges and showmanship seen in Glasgow last year. Promises to burn less coal and reduce methane pollution are yet to be honoured. But it was the lack of meaningful monetary contribution funnelled towards green investments in developing countries that stood out.

Citywire Amplify spoke to Ninety One sustainability specialist Annika Brouwer, who is in Sharm el-Sheikh, where she has been participating in discussions surrounding emerging market investment. She said the overarching message for this year’s climate summit had been ‘pledges to action’ – while some countries and entities were ‘hesitant to make further commitments without having action to their previous commitments’.

Brouwer suggested that the lack of ‘flashy announcements’ yesterday could indicate that ‘the wheels were spinning in the background’ and that some countries were doing the work. She said it was mostly African countries that had stepped up to tackle the climate transition.

Projects worth $120bn were announced yesterday in a bid to help developing countries cut their emissions. These projects, according to Brouwer, are ‘almost shovel-ready’ but lack finance – hence why the UN Framework Convention on Climate Change consulted developing regions to identify them and allocate finance their way.

‘The problem was that if you asked any of these financial institutions, banks, asset managers or investors: “Why haven’t you deployed capital?” They often say it’s because we don’t know where the projects are. Now [you can] identify projects to match-make where the money is needed. And that’s great that this has emerged, because there is space between those that are allocating capital and those that need the capital – and that space comes in the form of the type of finance that is needed, whether it’s a loan or grant or investment.’

Brouwer added that despite the pessimism, the financial system has started to ‘lock into place’ where banks and asset managers can play a meaningful role in deciding where early-stage capital should come in.

‘[This can] help scale up the technology, for instance, and then, very critically, how the private sector can work with the development sector. So with countries’ commitments that we hear about but never see the money for, how does the private sector work with development finance to be more catalytic and more effective? That’s what we’re seeing coming out of this COP – the development sector coming together with the private sector to say: we should be working together to be driving some of this, not working in isolation.’

The geopolitical instability caused by the war in Ukraine has highlighted the importance of gas. It is abundant in Africa, and Brouwer said this was being exploited by Europe while pressuring African countries not to industrialise or invest in fossil fuel energy systems – a story she said was all too common.

‘Germany yesterday was accused of being a climate colonialist because it’s exploiting Africa’s gas resources, given the Russia–Ukraine war. It’s a story that we all know about and one that no one likes to talk about, but I think it came to the fore yesterday. Where the energy crisis meets climate commitments meets deployment of capital is something we’re going to see over the next 12 to 18 months.’