Rebecca Minguela, CEO at ClarityAI, has expressed her frustration at the lack of urgency the financial services industry is placing on the climate transition as she attend COP28 in Dubai.

Speaking to ESG Clarity, Minguela highlighted financial firms are investing billions more in cyber security and financial data than they do in adopting technology that will help with their transition.

“I’m not saying cyber security or the financial risk are not the important topics, but we are talking about the entire planet here.”

See the full video interview above and transcript below

NK: Hello and welcome to this COP28 video. I’m joined by Rebecca Minguela, who is CEO of ClarityAI and she’s joining us from Dubai. Thank you so much for your time today.

RM: Thank you very much for inviting me.

NK: What was the atmosphere like on the ground? How is everyone feeling a week into the conference?

RM: Well, after a few days here now I’m exhausted, because it’s intense. It’s nonstop meetings and people are excited and want to do a lot of things in these few days. But still a lot of excitement going on as well.

NK: Okay. I understand there’s lots of big tech companies there, what role do they play in the conversations?

RM: There are a lot of big tech companies and also smaller companies like us. And our role is, of course, to push as much for technology adoption so we can accelerate the change and the transition, because so far as we all know, we have made a lot of commitments, but we are still short in the progress and the results that we need to achieve.

NK: I’ve heard about lots of talk about innovation and technology. What has stood out for you in terms of where we can really accelerate the transition with innovative tech?

RM: Well, there are a lot of different areas in which technology plays a big role for this transition goals and one of them, well the one that I can talk about the most is the one that my company ClarityAI plays in, which is using technology and specifically artificial intelligence to help investors and organisations and also consumers to better understand environmental impact, climate impact and more broadly social impact as well.

NK: And lots of people are looking at AI now to be the shiny new thing that’s really going to help our lives and maybe accelerate the transition. Are you seeing that? How is you are playing a part in the conversations of COP28?

RM: AI is a very fancy term these days. It has been for a while and two things I would say on that. The first one is that there are much more basic technologies that need to be implemented and adopted, even way less sophisticated than AI. Even use of basic datasets in many cases by investors or reporting tools by organisations, so that will be my first message. It doesn’t need to be very sophisticated technology or AI algorithms to solve part of the problems that we need to solve.

On AI specifically, of course, it helps in many areas today. One of them is in helping estimating data that is not available. As we know, we still lack data on listed companies, but also, of course private companies in terms of the emissions, but also the sustainability data on environmental data. And AI can help do those estimations for the scale.

It also helps collecting information at scale and it also helps reporting on the scale. As we know there are regulations growing and companies and investors need to comply with those regulations – that might be a bit cumbersome sometimes and AI is going to help them comply with those regulatory requirements as well.

NK: Yeah, and I’ve seen lots of focus on private companies and collaboration with and making sure they are playing their part in this transition. How are those conversations playing out on the ground – is there willing? Is there a lot of dialogue going on, or is it needing more education?

RM: There have been several commitments from public and private institutions, so from the financial sector around helping private companies report, track and, of course, transition, which is the ultimate goal. But there is still a lot of work to do.

The capital inflows that are needed for private markets and especially for emerging markets, I believe the estimations is that by 2030, $2trn of investment will be needed for transition, climate transition in emerging markets. The amount of capital that needs to be flowing into emerging markets and mainly into private sector in most of cases is in the trillions of dollars, right?

It’s important that we have the right information to prioritise those investments and deploy those investments as efficient as possible.

NK: What would you say has been your highlight from COP28 so far?

RM: Well, every year when I come to COP – last year, I couldn’t go to the one in Egypt, but I went to the one in Glasgow, COP26, there is a mix of excitement and bit of exhaustion. There’s so much in so many intense days and at the same time, a bit of… I’m not going to say disappointment, but every year we fell short. We fall short of meeting the goals, right? So and when you go around the conference and you see all the world leaders and business, we have everyone we need in terms of action and decisions, and I see a lot of commitments being done. And my impression is that after those two very intense weeks, maybe we are not acting with a sense of urgency that we should be acting. I am just going to give you a couple of numbers that I was discussing with a few people in the last few days.

We are all committing a lot of investment but, for example, you know, adoption of technology within the financial industry, the ESG data and analytics market is estimated to be $1bn. At the same time, the financial industry spent $220bn in cyber security, $50bn in financial data. I wonder why is there such a discrepancy given the importance of the problem?

I’m not saying cyber security or the financial risk are not the important topics. But we are talking about the entire planet here. So why is it that we are not investing faster, adopting technologies faster as well? I guess it’s a mix of excitement because of all the commitments and there is progress being made, but a bit of frustration maybe, or disappointment about the speed or the lack of the speed at which we are we are maybe trying to get through to those goals or commitments.

NK: Yeah, absolutely. Hopefully we will have some more clarity very soon. My last question for you is what do you think is an action point for the investment management industry to take away from COP28?

RM: I think the main takeaway is that the actions for the climate transition – we have to do it every day.

Those adoptions, those conversations, those commitments and most importantly, the tracking of the progress needs to happen every day because now the macro environment is not very favourable, and that makes companies and maybe slow down on implementing certain initiatives or decreasing those efforts. And I guess we should not find excuses to act as seems to happen recently.

But I am an optimist. I want to believe that we’re going to keep pushing forward. We just need to work much faster.

NK: Thank you so much for your time. I hope you enjoy the rest of the conference.

RM: Thank you for inviting me.