The scale and urgency of the climate issue is evident. We’re receiving warnings from all directions. Based on the data we compiled, climate change is included in the top five topics of agenda for almost every brand and organisation. Every day, new coalitions are formed, new policies and regulations implemented, and new flows of capital emerge. Four of the highest-ranking five G20 companies report on their environment-related business risks and opportunities. Scott Keogh, CEO of Volkswagen Group of America, believes that “one of the biggest industrial transformations probably in the history of capitalism” based on the fact that electrical automobile sales reached nearly 20% of all car sales.
It is difficult not to see heavy traffic among corporate investors. At the 25th United Nations Climate Change Conference in 2019, more than 630 corporate investors, managing more than $37 trillion in assets, issued a call for a collective radical change to overcome the global climate crisis. As the issue gains momentum, it’s useful to highlight that, in the last five years, an investment of more than $2.8 trillion was made for climate financing. However, we need to act quicker in order to reduce major risks and to utilise major opportunities. The term “net zero” is heard more and more frequently as it signifies the goal for which both small and large companies work toward until 2050. Yet, our ultimate goal should be climate positive or carbon negative. Instead of balancing out the amount of generated greenhouse gases with the amount removed, an effort should be made to eliminate the generation of more greenhouse gases. This is the only way to ensure a safe climate for future generations! We need to bring together smart ideas, skills, and networks in order to direct systemic change and capital flow; we need to make smart designs and develop smart models. In this big picture, there are some catalysts at play—structures that undo the (mostly) complex lock of change. We had a pleasant conversation about the new world order and the future with Deniz Harut from Pollination, a climate change investment and consultancy firm with expertise in accelerating the transition into a net zero and eco-positive future.
We were excited to follow your international achievements and your joining Pollination. What brought you here, one of the world’s most prominent sustainability developments, at this point in your professional journey?
It definitely is an exciting new challenge. I was lucky to work at an international bank which had a keen focus on emerging markets. For the past 16 years, I saw first-hand how by making the right investment decisions you can have a meaningful impact on people’s lives. I had the privilege of working with phenomenal people from some of the most interesting parts of the world including Africa, China and Asia. Working in these markets provided me with a different perspective and a valuable set of skills including courage, problem solving, and innovation. I’ve always considered myself to be a creative banker. Over the years, my work became increasingly focused on creating tailor-made solutions to big societal challenges: How do you finance energy access in Africa? How do you make solar panels economically viable for rooftops? How do you support the growth of sustainable businesses internationally? How do you back gender equity and channel billions into female led businesses? Throughout the course of my career, I have seen how the world has moved from climate denial to climate change. And, I became very, very busy helping countries, companies, and investors understand how they could cut down emissions significantly and achieve net zero. The reality is, this mega challenge requires holistic solutions developed by people with diverse sets of skills and a lot of money. So, I wanted to take this on as my next challenge. The net zero, nature positive transition will be a long journey. Pollination was set up to bring about this necessary change. To become everyone’s partner on this journey by specialising in climate and nature-focused investment and advisory. My colleagues are experts from across the spectrum of climate law, policy, finance, nature and project development, and together, we discover something new every day which makes this new chapter of my career incredibly exciting.
Pollination brings together diverse stakeholders and solutions to accelerate the transition to a net zero, nature positive future. It designs innovative solutions to climate change and invests. Can you give us a few examples of these projects?
The scale and urgency of climate change is clear. We must act. But, there is also the other side of the coin. Moving capital to climate and nature positive solutions is a once-in-a-lifetime opportunity, and not only does it have huge value creation potential but it will also deliver the serious environmental impact we all need. Our work is very diverse and constantly evolving. It ranges from working with large global investment banks to design their transition financing strategies and green lending frameworks; and establishing a joint venture with HSBC for a $1 billion Natural Capital Fund supporting new product development for the market; to designing a $5 billion Rainforest and Biodiversity bond with the Indonesian government. We are connecting the dots between corporations, governments and investors, and through a unique combination of asset management, project investment and advisory we can ensure that capital starts to flow more quickly, and to the right places.
For a net zero, nature positive future, there needs to be a harmonious collaboration among people, governments and investors. What is the key to achieving this?
We are living through a crisis that threatens capitalism as we know it. To achieve the goals of the Paris Agreement and limit global warming, the global economy needs a radical rewiring. I cannot think of any other issue where politicians, investors, corporations and the public are all on the same page. Limiting temperature rise is a key shared objective but can capitalism move fast enough and far enough? In order to be successful, the process must be as clear as the objective. This will also enable the billions of dollars needed to flow into climate-focused solutions. At Pollination, we are focused on building the most optimal and credible partnership model with risks and returns shared appropriately across stakeholders.
What are the latest trends on sustainability? What changes should we expect in the near future?
I can easily say the sustainability trend is here to stay. In Europe, we have experienced quite a significant change in habits in recent years and I can see Turkish consumers are becoming more environmentally aware every day. Let me give you a few examples:
1. Consumers have already started questioning the environmental impact of their purchases. We expect a greater scrutiny on large companies reporting on their carbon emissions. This transparency brings accountability so it is a very good thing.
2. Electric cars will become a mainstream purchase in the very near future. Many European cities introduced incentives which accelerated the shift to electric vehicles, and the prices are coming down.
3. Ethical/sustainable investments will continue to rise. It is increasingly important for people to know where their own money is invested. There is increasing pressure to exit investments into fossil fuels and move towards companies that will help limit global warming. Well, considering the growth in demand for these solutions, this makes perfect sense.
4. Net zero is old news, climate positive is the next big thing. I know I mentioned net zero a lot already. But just to show you how quickly things evolve in the climate space, soon it may not be enough to be net zero. We expect that climate positivity will supersede it soon, meaning it’s no longer about just cutting down emissions but actually creating an environmental benefit by, for instance, investing into nature-based solutions.
5. Apps can help the fight against climate change. We are seeing a rise in technology meeting sustainability. In other words, the twin transformation. COVID has accelerated digitisation of many businesses and this certainly has had a positive impact on climate as well. Furthermore, we are seeing more green start-ups emerging each day. Whether it’s an idea focusing on data to help investors find the most sustainable companies or an app that helps reduce food waste by sharing it with neighbours, more money than ever is flowing into green start-ups.
"NET ZERO IS OLD NEWS, CLIMATE POSITIVE IS THE NEXT BIG THING. THIS MEANS CREATING AN ENVIRONMENTAL BENEFIT BY INVESTING INTO NATURE-BASED SOLUTIONS."
What are your personal goals for a better world?
Change comes from within and I have always thought it is important to lead by example. I would like to think, given how involved I am with the topic, I have enough knowledge to manage my environmental footprint. I have been a vegetarian for more than 10 years, drive an electric car, buy my groceries from the local farmers, and run a very minimal low-waste lifestyle but it is still a struggle. I guess it starts with defining what a better world looks like. For me, it would be a world in which every business leader is also a climate leader and a world in which there is equality.