Interview with Christiane Laibach, KfW Executive Board member, on the occasion of the UN Climate Change Conference in Sharm el-Sheikh (COP27) on climate change and biodiversity, and their importance for KfW Development Bank.
You once said that you felt strongly about the issues of climate and sustainability. Why is that?
CHRISTIANE LAIBACH: Climate and sustainability are major global issues that will have a decisive impact on our lives today and in the coming years and decades. This applies to us as individuals, to societies, but also to KfW, which sees itself as a climate and sustainability bank as it actively supports and promotes this change. And it continues to apply during Russia’s war of aggression in Ukraine and the food and energy crisis it has caused.
The resolutions on how to shape this change have been around for a while, with the keyword being the Paris Climate Agreement, but in many countries, there is a lack of implementation. Is there more movement now?
The risk exists that this important issue will be overshadowed by the multiple, parallel crises we are experiencing. That is perhaps understandable - there is a tendency to focus on the solutions for the newest problems. But we must not forget that climate change and biodiversity are challenges of a long-term nature.
Christiane Laibach has been a member of the KfW Executive Board since June 2021, and is responsible for international financing. She has spent over thirty years at KfW and was most recently Chair of the Management Board at KfW subsidiary DEG. Before that, she was a member of the Management Board at KfW’s other subsidiary, KfW IPEX-Bank. She has a degree in economics and many years of experience in leadership positions in export, project and development financing.Read more
What do you hope from the Climate Change Conference in Sharm el-Sheikh?
We need specific and robust goals for the member states that are also ambitious. The ones we already have are a good start, but they are not enough. The national commitments to climate protection have become more ambitious recently. This is reflected by the latest data from the IPCC. Obviously, it is a welcome development, but it is still not enough to meet the 1.5-2°C goal. I really hope that, despite all other challenges we’re facing, the climate summit will lead to noticeable progress on real climate action. So I expect the COP to send a credible political signal as to the irreversibility of the path we laid in Paris. Then we can further advance its implementation in the decade to come.
Many young people in particular do not believe that progress is happening quickly enough. How would you respond to them?
First of all, I would tell them that I welcome their non-violent actions of the past years because they have brought a new dynamic to it. The reason why things are not going any faster is, in my opinion, the following: we are facing a transformation that is very demanding, challenging and complex. It requires a successful interplay of policy, general conditions, regulations, the right incentives and sufficient funds. We also still need to make technical progress, for example in air and sea transport. The stop of Russian gas deliveries forces us to make compromises. This is obviously not the scenario I would have preferred. However, we need these compromises now because we also need energy security for social and economic stability. In this context, it is key that we do not lose sight of the transformation goals.
World Climate Conference in Sharm el-Sheikh (COP27)
In November 2022, the Parties to the Framework Convention on Climate Change will meet in Sharm el-Sheikh for the UN Climate Conference, COP (Conference of the Parties) 27. COP27 is intended to advance the implementation of the Paris Climate Agreement. Because the global community is not on track to achieve its self-imposed goal of limiting global warming to 1.5 degrees.COP27 Sharm el-Sheikh
How seriously do developing countries and emerging economies take climate action?
The awareness is there. And, for example, we are seeing a clear shift towards renewable energies almost everywhere in the world. The lower costs of wind or solar energy, for example, facilitate the spread of sustainable technologies. This means that the direction is clear, they have started on the path. But fundamentally, poorer regions of the world have to deal with many challenges, currently with the consequences of the food crisis, the lasting impact of COVID 19, and a general slow-down of the global economy. This means that climate action requires an even greater effort on their part. It is all the more important that they receive international support in this...
...and that climate action is cushioned by social programmes?
With every transformation, there are also losers. If we want to successfully shape this change, we have to take them with us. This is even more essential in developing countries because the economic situation is precarious for even more people, especially since the start of the pandemic. Social protection and employment programmes, for example, help here. These are of particular value, if they are tied to investments in sustainability. For example, we are cooperating with South Africa in a programme called “Just Energy Transition Partnership”. We are pursuing all three goals at the same time: fewer fossil fuels, energy security and social support programmes. This ambitious partnership is a joint action with the EU, the USA, the UK and France. And the German Federal Government is negotiating other climate partnerships.
What is KfW Group doing to advance climate action?
We have imposed the "TranSForm" programme on ourselves, in which we are gearing all our financing towards supporting the transformation of our partners and making KfW climate-neutral by 2050. KfW Development Bank has been financing climate action and adaptation in a targeted manner since around 2008 – with sharply increasing funds, amounting on average to five billion euros annually. This corresponds to a good half of our commitments. For the other half, we make sure that they do not harm the climate. We are also one of the largest issuers of green bonds and are constantly working on new innovative approaches to promote green capital markets, including in developing countries. With LAGreen, we are able to implement a first lighthouse project in Latin America.
And KfW's subsidiary DEG is already very active in the area of climate and impact. It finances and advises companies that implement renewable energy projects in developing countries. A recent analysis of DEG's portfolio shows: The energy suppliers co-financed by DEG produce around 42 TWh of green electricity annually, which can supply over 38 million people. In addition, 16 million tonnes of CO2 emissions are saved. With its focused business strategy, DEG has concentrated even more strongly since the beginning of the year on financing high-impact and climate-friendly projects of private enterprises. To this end, it is also further expanding its advisory services. Incidentally, DEG's portfolio is to be climate-neutral by 2040.
Do you think it is feasible to get to net zero emissions by 2050?
I would put it the other way round and say: we will certainly only make it if we go to extreme efforts in the next five to ten years – and that as a whole, all over the world. In this respect, the next few years will be crucial.
According to scientists, preserving biodiversity is just as important as protecting our climate. Yet one of these subjects seems to loom much larger than the other in public debate. Why is that?
It’s true we are lagging clearly behind when it comes to biodiversity. That’s why I’m hoping we’ll see good results and ambitious goals at the Montreal biodiversity summit in December. We need a solid framework, just like the Paris Agreement. There are several reasons for the lack of progress here but one is metrics. For climate protection, we have greenhouse gas emissions. Measuring biodiversity isn’t that straightforward. As well, emissions have a global impact whereas biodiversity is a local phenomenon that calls for local solutions. Nonetheless, I believe there is growing awareness of the fact that we cannot afford to allow biodiversity to decline the way it has been. We are seeing that there are consequences when insects or birds die out. I think the discussions are now taking place.
Yet trees, meadows and forests are visible to everyone – they’re something you can physically reach out to and touch.
That is true, but the causes are more complex. When bees die, we notice it. We also see when there are fewer insects on our windscreens. But it is not immediately apparent why that is the case, what has ultimately brought that fate upon the bees and what needs to happen if bee colonies are to grow again. How disappearing natural environments affect climate change and human health. And I am only mentioning bees here by way of example. We could say the same for fungi, algae or worms, not to mention many mammal species. The background factors are multi-faceted in each case.
Could another part of it be that we take nature for granted?
That plays a role, too. Most of the time, we only notice species disappearing when the process is already underway and past the point of no return.
How serious do you think the situation is?
Very serious. All the numbers we’re seeing back that up. The decline in biodiversity is dramatic and moving ahead at an unprecedented speed. Especially as there are direct feedback effects on the climate and food security, which ultimately have an impact on our living conditions, too.
How important is preserving biodiversity at KfW?
KfW has been working in this area for decades, and operating on behalf of the German Federal Government, we’re one of the largest bilateral donors in the world. Our work in this category is highly varied, with more than 300 projects in 60 countries and regions, including diverse and in some cases large nature conservation areas. But we also promote reforestation and renaturing efforts and are always looking at new approaches and new tools. For example, in recent years, we have set up a number of innovative initiatives, such as the Blue Action Fund and the Legacy Landscapes Fund. Through those, we strive to collect and make even more funding available for the conservation of nature around the world. Incidentally, I worked on reforestation projects in Vietnam during my early years at KfW, so I also have personal experience in the field.
Blue Action Fund
Together with the Federal Ministry for Economic Cooperation and Development (BMZ), KfW has established the Blue Action Fund, a foundation for international marine conservation. The non-profit foundation supports non-governmental organisations in partner countries in establishing new marine protected areas, strengthening the management of existing protected areas and promoting sustainable fishing and environmentally friendly tourism. In addition to Germany, Norway, Sweden, France and the Green Climate Fund have contributed to BAF, whose conservation areas are now as big as the surface area of Germany.Blue Action Fund
Why is it important for KfW to assist developing countries with nature conservation?
There are various reasons for why we do that. Firstly, many developing countries are located in more climatically extreme parts of the world. On the one hand, that means their natural environments often have more biodiversity – but on the other, it means they are more challenging. Secondly, a much larger proportion of people in poorer countries live directly from and alongside nature, their lives are inextricably linked to it. If we want to eradicate poverty – and that’s one of our overarching goals at KfW – then we must retain people’s livelihoods. That includes protecting nature. But it also means that nature conservation must not come at the expense of people. That’s a crucial point from KfW’s perspective. Conservation can only succeed when people buy into it. So you have to create a good balance between non-use and sustainable use, which has to be found together with the partners and residents in the local area. This is certainly the greatest challenge as far as biodiversity conservation is concerned.
Will KfW be expanding its involvement in this area in the years ahead?
During a visit to the UN General Assembly, the Chancellor announced that Germany would be investing 1.5 billion euros in biodiversity protection by 2025. We are very happy to support the Federal Government in implementing these funds, as it is quite clear that biodiversity and climate action go hand in hand. Keeping the natural environment intact and restoring as much of it as possible is crucial to limiting global warming, as forests, peatlands and soils are natural carbon sinks that can help to effectively reduce carbon dioxide in the atmosphere. This is why KfW is very active in both areas and will continue to provide intense support in the years to come.
Published on KfW Stories: 7 November 2022.
The described project contributes to the following United Nationsʼ Sustainable Development Goals
Goal 17: Revitalize the global partnership for sustainable development
The 17 goals can only be achieved within the context of a strong global partnership. Governments, civil society and companies must work on implementing them together. “No one left behind” is the main principle behind Agenda 2030. The UN member states have made commitments to reach the people furthest from the goals first. However, the funds available for public development cooperation have decreased in the poorest countries over the last few years. Only five countries have kept their promise of maintaining the 0.7 per cent prescribed by the Official Development Assistance quota – that is the share of gross national income dedicated to public expenditures for development cooperation. Germany has also not yet met the Official Development Assistance quota, although it has continuously increased its expenditures in the last few years.
All United Nations member states adopted the 2030 Agenda in 2015. At its heart is a list of 17 goals for sustainable development, known as the Sustainable Development Goals (SDGs). Our world should become a place where people are able to live in peace with each other in ways that are ecologically compatible, socially just, and economically effective.
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