COP28: Food system declaration is ‘absolutely critical’

Lombard Odier's Thomas Hohne-Sparborth welcomes the pledges around food systems as he gives his insights from Dubai

Having different stakeholders in the room discussing common climate solutions, particularly around food system transformation, has stood out as a positive step in the first few days of COP28, according to Thomas Hohne-Sparborth, head of sustainability research at Lombard Odier Investment Management.

Talking to ESG Clarity from Dubai in this video interview, he discusses the controversies and the ‘wins’ so far.

The full transcript of the video is below:

NK: Hello, I’m Natalie Kenway, editor in chief at MA Financial Media. And I’m here speaking to Thomas from Lombard today. Thank you so much for speaking to me today, Thomas.

THS: Hi, Natalie. Pleasure to be with you here from Dubai.

NK: What’s it like on the ground in Dubai at COP28?

THS: It’s an interesting atmosphere, very dynamic. Lots of people moving about, it’s a bit more spread out then previous COPs. [It has] been quite a busy few first days, the usual kind of flurry of announcements that you tend to get at these  meetings, but a bit of dynamism and a few new faces walking around as well. So it’s been interesting to be a part of.

NK: Okay, great. What are the most significant announcements for you? What have you taken away from the weekend or since Thursday really?

THS: I think the biggest thing in terms of the actual announcements is the broadening of the agenda, which has been very helpful. Clearly, this is partially about the energy transition and restoring a place for energy transition matters, but it’s about so much more than that. We’ve been quite interested to see the strong focus on food systems. For instance, on the very first day 130 countries basically committed to ensuring that thinking around transformations of food systems actually becomes part of individual country commitments, which is pretty vital as they account for a substantial share of emissions [the message is] this isn’t just about energy.

There’s been a focus on health, there’s been a focus on adaptation. So starting to recognise the much more central climate and all the associated issues that come with it has been pretty key. Also to us and investors, because it’s certainly in those associated opportunity sense where we’re seeing as investors a lot of the disruption and a lot of the value chain opportunities as well.

Click here for ESG Clarity‘s COP28 coverage.

NK: Okay, fantastic. And I noticed that there was the launch of net zero task force [Taskforce on Net Zero Financial Policy], I think the Principles for Responsible Investment announced that over the weekend, is that  significant for you?

THS: Yes we have looked at the zero task force and some of the other net zero frameworks, what’s helping and what’s advancing this, and the thinking around net zero has just become so much more sophisticated over the last few years. A few years ago to the finance industry, the whole concept of net zero was new. People were getting confused about the difference between positive and negative emissions and where do offsets play and where do emission reductions actually fit in. Also how as an investor should you start thinking about this in terms of your own emissions, but certainly goals of your portfolio emissions, how do you manage that and measure that, how do we actually do that if those emission reductions, how do we apply a nuanced approach sector by sector… it is that evolution of thinking that I think we’ve continued to see in the finance industry in the development of this and other taskforces and working groups to create a little bit more substance to this whole concept of what it means from a financial perspective.

NK: We’ve had what could be described as some controversial comments from the COP28 president saying that there is no scientific backing to phasing out of fossil fuels, i think were the words. But how has that gone down?

THS: Look, I think it was clear when COP28 was going to be organised here that there would be controversies around that very clearly. So it’s always been intentional and the design of the COP process to have a rotating presidency and involve different players and situate this discussion in different regions to get a different voice and to focus on different issues.

Now, when you face that criticism, you can ask yourself the question if we didn’t have the same players in the room, if we didn’t have the COP process at all, would this whole transition go any faster?

We would probably come to the conclusion you probably want the key stakeholders, whether they’re aligned to your vision or not, in the room to see eye to eye and understand where you’re coming from, and actually try to find common ground, and at least begin to understand that perspective.

And there have been some positives that have come out of that as well. Look, the big discussion needs to be and continues to be about the phaseout of fossil fuels. And our view of science is clear to us. Also, the economics believe that energy transition is happening and will happen because the economic case for a move to the electrified economy powered by renewables is actually very compelling to us.

But it doesn’t mean that at the same time, while we still have a reliance on fossil fuels, we don’t at the same time need to work on some commitments to make that production more efficient as well. Because around 50% of emissions actually are linked to the production of oil and gas. So at least we can come up with some targets around that, that would be a ‘win’.

NK: I completely agree. And finally, the last question I wanted to ask you was about nature and biodiversity. As I know that that’s a big focus for Lombard Odier. Have you seen many announcements around that? As far as I’ve seen that there aren’t too many just yet.

THS: So the food piece was actually pretty critical to that. Look, the food agenda and the nature agenda are very closely tied up because as soon as you look at broader environmental challenges besides emissions, the food system is pretty central in that and around one third of all emissions come from the food system or the land system as a whole as well.

So simply that’s core focus as announcement has been key. And in addition, over the first few days we’ve seen commitments, announcements and finance from nature. We’ve had new commitments from Brazil and other places. So we’ve had the usual signalling of good intent. From our perspective, what has been interesting to see is getting some of some very different stakeholders in the same room talking about common solutions, particularly the nature-based solutions where we’ve seen finance operators on the ground together with more public finance sources come in anddiscuss the opportunity set, the rationale, how you would actually implement the deployment of capital at scale to nature based solutions, the to different kinds of solutions that are actually out there, the level of financing you need and the real value chain challenges that you need to overcome to drive that.

For us, it’s an area that we’re hugely interested in because we understand just how some of these trends are environmental questions and also what a compelling new economic model, nature based bio economy can actually give you a model that’s not based on extractive value chains, but value chains that are actually self-sustaining, where you still generate real economic flows, provisioning services, whether you’re generating food or timber, or ecosystem services like carbon sequestration, and where the markets starting to develop to actually price that in and give investors a return on their capital.

It’s these kind of discussions that have started to happen, and that’s really exciting for us.

NK: Okay, great. Well, thank you so much for that. It’s really great to hear about how everything is going on the ground and enjoy the rest of your time at the conference.

THS: Thank you so much. Pleasure to speak.


Natalie Kenway

Natalie is editor in chief at MA Financial covering ESG Clarity, Portfolio Adviser and International Adviser. She was previously global head of ESG insight for ESG Clarity and has been an investment journalist...