CUTS Daily Bulletin #4 | October 19, 2023
The World Investment Forum, 2023 is being organised at Abu Dhabi on 16-20 October, 2023. To visit the website and access more details about the conference, interested individuals are encouraged to visit the WIF website.
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Programme at a Glance
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Role of Trade and Investment Policies in Boosting NDCs
(Date: October 19, 2023 Time: 8:30-10:00)

Trade, investment, and green industrial policies can help countries achieve carbon emission reductions outlined in their National Determined Contributions (NDCs) and energy transition plans (ETPs). Looking at the challenges that face the global community in reducing carbon emissions and energy transition this session focussed on the interventions at global, regional and national levels required to make NDCs and ETPs deliver. The session also underlined the impact of Environmental Social Governance (ESG) while declaring their NDCs.
Session Highlights
Trade and Foreign Direct Investment (FDI) are most widely used by countries to achieve carbon emission reductions to set forth their NDCs and energy transition plans. In this pursuit, cross-border technology transfer is crucial as this might in turn build technological solutions that can cater to carbon emission reductions. Large nations like China and India have used technological solutions to catch up and build their capacities in the solar and green sectors. There is a need for the implementation of NDCs and to create new transformations for technology transfer, speakers in the session argued.

Bilateral trade agreements need to be explicit about the NDCs as countries differ from each other in their strategies for pursuing NDCs. The agreements also need to fit into country strategies and need to be coherent with each other, the speakers opined.

Trade can have an incremental effect on the environment. At the African Continental Free Trade Area (AfCFTA), African nations have looked at African NDCs and this that it is possible to pursue trade transformation objectives and also reduce carbon emissions.

The International Renewable Energy Agency (IRENA) is closely observing the pursuance of renewable energy targets as declared by countries in their NDCs. Out of the 182 countries that have incorporated renewable energy targets in their NDCs, 152 nations have quantifiable targets for NDCs. The world needs 5 TW of renewable energy generation by 2030 to meet the carbon emission targets.

Many countries today are falling very short of renewable energy targets set in their NDCs. About 650 million in the African continent alone lack reliable sources of energy. The conditional targets set by both developing and developed nations are quite ambitious.

For African nations, climate is an entry point for getting support from donors. There are a lot of opportunities for green investments. On the demand side, sustainable development Finance acts as an incentive for African nations to transition to sustainable energy sources.

ESG integrated valuation of technology needs to be performed and technology transfer needs to be made accordingly. Moreover, there is a need for looking at trade and investment in a broad perspective and not in silos. The policies on fossil fuels, those of energy, climate and environmental policies should be coordinated. Here, policymakers have a big role to play. They need to spend more time on developing such a synergy. Besides, domestic policy coordination on NDCs there is also a need for cross-country coordination to boost NDCs through trade and investment.

Further, there is a need for inter-sectoral coordination as well and it is important to boost coordination between different sectors. For example, energy can help coordination with transport. This, in turn, will help achieve their goals and the welfare of other goals. Also, though NDCs are not signed by trade ministers, trade and investment policies have a huge impact on NDCs. Different policies with one common purpose. There must be more platforms for discussing the inter-country coordination of NDCs.

Speakers of the Session were:

  • Fantino Polanco, Vice Minister of Industrial Development at the Ministry of Industry, Trade and MSMEs, Dominican Republic
  • Xiaolan Fu, Professor of Technology and International Development, Oxford University
  • Diala Hawila, Programme Officer, IRENA
  • Stephen Karingi, Director of Regional Integration and Trade, United Nations Economic Commission for Africa
  • Mélanie Laloum, Lead Economist, International Chamber of Commerce
  • Marco Murcia, Climate Change Advisor, Ministry of Environment, Colombia
  • Cristian Rodriguez Chiffelle, Senior Advisor, Global Advantage and Public Sector Boston Consulting Group and Luksic Fellow and Visiting Scholar, Harvard's David Rockefeller Center for Latin American Studies
  • Miho Shirotori, Acting Director, Division on International Trade and Commodities, UNCTAD
(Reporting by Mihir Shekhar Bhonsale)
Game Changing Solutions for Sustainable Development: Energy
(Date: October 19, 2023 Time: 9:30-10:30)

The session provided a unique opportunity to engage with the innovators behind some of the most groundbreaking concepts, cutting-edge technologies, and forward-thinking business models in the race to address the critical challenge of accelerating the energy transition. It explored concrete solutions ranging from the sustainable extraction of critical minerals, the utilisation of renewable energy sources, the development of efficient energy storage solutions, and the advancement of sustainable transportation systems.

By highlighting the inspirational journeys of companies operating at the forefront of the energy transition, the session aimed at giving valuable insights into the indispensable role of investment policymakers and the ecosystem in fostering businesses and solutions that can make a substantial contribution towards achieving climate goals.

Session Highlights
In the panel discussion, the company Nexus Power's groundbreaking innovations in the electric vehicle (EV) industry took the spotlight. The company's efficient and eco-friendly batteries are not just addressing the charging time challenge but are also making significant contributions to environmental sustainability and farmers' livelihoods. Nexus Power's commitment to reducing charging times, as highlighted by one of the panellists, is set to play a pivotal role in accelerating the widespread adoption of EVs. This approach truly represents a win-win solution for the EV industry, the environment, and the agricultural community. Their efforts are poised to shape the landscape of the EV industry, ensuring a new era of efficient and sustainable mobility.

One panellist introduced an innovative solution which offers a revolutionary approach, capable of extracting and refining lithium in an astonishingly short period – just five hours. This reduction in processing time is a remarkable leap forward from the conventional 30-day timeframe. The ability to extract lithium and make it market-ready in just five hours offers unprecedented advantages. It not only accelerates the production and delivery of lithium but also provides a more efficient and sustainable source of this critical mineral. This innovation comes at a time when the technology and electric vehicle sectors are expanding rapidly, and a swift, reliable supply of lithium is essential.

A panellist spoke about gas fermentation as a process that combines biotechnology and process chemistry to convert waste carbon, including emissions from industries, into valuable resources. The idea is to harness the power of microorganisms and innovative chemical processes to transform carbon emissions into a new carbon economy, where waste is not merely disposed of but repurposed as a valuable resource. The implications of this vision are profound. It not only offers a sustainable and eco-friendly solution for mitigating carbon emissions but also opens up exciting possibilities for creating a circular carbon economy. Instead of leaving a carbon footprint, they envision leaving no carbon behind, contributing to a greener and more sustainable future.

In conclusion, the panellist's insights shed light on the transformative potential of gas fermentation in addressing the carbon challenge. It symbolises a paradigm shift in our approach to carbon emissions, signalling a future where waste carbon is not discarded but utilised to drive a carbon-neutral economy. This innovative concept represents a beacon of hope in the ongoing efforts to combat climate change and build a more sustainable world.

One panellist's words remind us that in the realm of emerging technologies, the traditional playbook for financing may not always suffice. As they endeavour to bring transformative innovations to life, they must also pioneer fresh approaches to financing that match the dynamism of the technologies they aim to develop. The pursuit of funding is a vital part of the journey towards innovation, and in this dynamic landscape, they must be as innovative in their financial strategies as they are in their technological advancements.

The intersection of the three pillars — energy, governance, and technology — presents a comprehensive framework for building a sustainable, prosperous, and equitable world. By embracing the urgency of the energy transition, reimagining governance for a globalised context, and harnessing the potential of technology. The words of the panellists inspire us to continue exploring innovative strategies, forging meaningful partnerships, and shaping policies that address the multifaceted challenges of our time. It is through collective action, forward-thinking policies, and a commitment to these pillars that we can drive positive change and work together to create a better future for all.

Speakers of the Session were:

  • Nishitha Baliarsingh, Co-Founder and Chief Executive Officer, Nexus Power
  • Nikita Balirsingh, CIO and Co-Founder, Nexus Power
  • Carl-Magnus Norden, Founder, Volta Trucks
  • Amanda Hall, Founder and Chief Executive Officer, Summit Nanotech
  • Preeti Jain, Global Director, Policy, Chemicals & Carbon Solution, LanzaTech In
  • Khaled Sharbatly, Chief Executive Officer, Desert Technologies
  • Fifi Peters, Financial Journalist, CNBC Africa
(Reporting by Rifa Kabeer)
Promoting Climate Action through Trade and Investment Policy
In partnership with the World Trade Organisation (WTO)
(Date: October 19, 2023 Time: 10:00-11:00)

International trade and investment policies play a crucial role in creating the enabling environment for the flows in investment, technology, goods and services required for the energy transition and other climate change mitigation and adaptation actions. This session, organised jointly by the WTO and United Nations Conference on Trade and Development (UNCTAD) Secretariats presented a preliminary set of policy pathways to help guide policymakers on options for climate action through trade and investment policies.

Session Highlights
At the UN level, there is attention to interagency participation in trade investment and climate action. However, the policymaking world is still operating in silos, and trade and investment treaties are still far from promoting climate action. Of the 3,400 trade treaties concluded so far among countries, there are inconsistencies, overlaps and gaps in promoting climate action. An overwhelming number of 2,900 treaties have been concluded before the year 2010 and are not updated to serve sustainable development.

The fact that old-generation treaties are still in force, leaves a lot of work to be done including reforms in policy frameworks and treaties. There also needs to be a new generation of sustainable treaties that need to be drafted and reached among nations. Promoting climate change would also require tax reforms and ESG integration.

Of the 5,000 new generations of treaties, sustainable development treaties are more of a passive approach in sustainable development - carve out an approach - investor-state dispute mechanisms. Treaties need to be put in proactive promote sustainable development in developing countries. There needs to be consensus on concerted actions among nations, besides a need to incorporate Sustainable Development Goals (SDGs) in global supply and value chains and internalisation of international production.

There are 2.5 billion people across the world who rely on charcoal for cooking. Roughly 3.2 billion die globally because of cooking fuels. Therefore, there is a need to transition to clean cooking and revisit tariffs on cooking stoves. Many countries have set tariffs as high as 50 per cent. Therefore, there is a need to revisit tariffs so that products such as cookstoves can be made available at a cheaper and affordable cost for the benefit of consumers.

Green hydrogen provides an opportunity for many countries and is part of their clean energy transition strategies. There is a need for weaving global value chains for harnessing hydrogen to transition into clean energy.

Observance of Trade Day on December 04, 2023, in the upcoming COP28 UAE in its programme and a pavilion throughout the climate summit to be held in Dubai is an opportunity for promoting climate action through trade and investment.

There is a need for accelerating energy transition and only an investment of US$2.3tn is available whereas the world today needs US$4tn. This deficit needs to be addressed. Many countries lack an institutional framework for investment. There is also a need to pay attention to climate adaptation as most funds are available for climate mitigation. 

While discussing climate actions, one needs to also focus on agri-food systems and investment gaps must be identified in the case of all SDGs. Attention must be given to research to detect underinvestment in a certain SDG and help bridge the gap. Like for example, there is an agreement on subsidies for curbing illegal and unreported fishing which directly relates to SDG 14. Such an agreement must be used and objectives need to be added to promote the SDGs.
The IIA regime plays a crucial role in fostering regional integration and aligning with this approach is vital. A reform of IIAs is imperative to enhance regional integration and address climate change collectively. It is equally essential to consider the corporate social responsibility (CSR) aspects, particularly in the energy and social dimensions of investments. Inclusivity is also significant in this context. Collaboration at the policy level is essential to identify actionable steps. The recent conclusion of the Investment Facilitation Agreement (IFA) establishes a plurilateral framework for investment facilitation. While its primary focus is not direct promotion of climate action, some of its provisions could indirectly contribute to climate change mitigation.

Speakers of the Session were:

  • James X. Zhan, Director, Division on Investment and Enterprise, UNCTAD and Lead, UNCTAD World Investment Forum
  • Aik Hoe Lim, Director of the Trade and Environment Division, WTO
  • Amelia U Santos-Paulino, Chief of Investment Issues Section, Division on Investment and Enterprise, UNCTAD
(Reporting by Mihir Shekhar Bhonsale)
Investment in Agrifood Systems Forum: Investing in Inclusive Agrifood Systems Transformation
Organised by the Food and Agriculture Organisation of the United Nations (FAO)
(Date: October 19, 2023 Time: 10:00-11:30)

On the topic of inclusive agrifood systems, the session explored discussions on the need to focus on marginalised groups. At the same time, the panel also tackled the challenges these marginalised farmers face as a result of their limited access to resources and opportunities, and the possible solutions to these issues.

Session Highlights
Food insecurity is a global issue that continues to be tackled by governments and organisations alike. Development organisations like FAO have been working to inform stakeholders of the urgent need to mitigate the externalities of food production, such as water scarcity and loss of biodiversity. Ensuring that externalities are addressed now is also a way to ensure food security in the future.

The session also expounded on the need to strengthen the resilience of food security as numbers show that recent shocks caused by the COVID-19 pandemic and geopolitical conflicts have greatly hampered the initially positive trajectory of food security. Among those greatly affected by food insecurity are marginalised groups. Marginalised groups, such as women and youth small farmholders are considered to be the biggest cultivators of farms yet they are also the most affected by food insecurity, as well as limited access to resources and opportunities to participate in the market. As an example, a significant portion of the population in Nigeria are smallholders that cultivate farms but they are the same group of people that experience the most food insecurity.

To address these issues, the panellists discussed their experiences and suggestions. The biggest emphasis was on the need to create opportunities for smallholders to work with big commercial firms. This can be done by engaging with commercial firms to include smallholders as suppliers of food. Through this, smallholders are given opportunities to make profits and benefit from their work on an exponential level rather than relying on their yield from subsistence farming. This directly benefits women smallholders and encourages the youth to involve themselves in farming as they can view it as profitable.

Another way to address the issue of food insecurity among marginalised groups would be through the use of technology to help farmers consolidate and share their data with other farming communities online, and in helping them digitally analyse and predict yields. Technology can also help alleviate their dependence on middlemen in conducting business and, by extension, lessen their vulnerability brought about by this dependence. The panel also acknowledged that political resolution plays a big role in solving food insecurity. The stability of the public sector as well as the absence of geopolitical conflict would positively impact food insecure areas.

As a whole, the panel agreed on the need to connect smallholders with bigger private entities to open business opportunities for them that would enable them to make a profit that they otherwise would have no access to.

On the Panel were:

  • Fouad Bajwa, Co-Founder, Digital Dera Climate Smart Villages Network
  • Shada El-Sharif, Senior Advisor for Green Economy, Investment & Finance and Founder of Sustain MENA
  • Adeeb Qasem, Director, Economic Development Initiatives, HSA Group Yemen
  • Nicolas Farhat, Regional Innovation Hub Manager, Berytech
  • Nadine Gbossa, Director for Food Systems, International Fund for Agricultural Development
  • Benjamin Davis, Director, Inclusive Rural Transformation and Gender Equality Division, FAO of the UN
  • Maximo Torero Cullen, Chief Economist, FAO of the UN
  • Ahmad Mukhtar, Senior Economist and Head of Strategy and Policy, Regional Office for the Near East and North Africa, FAO of the UN
(Reporting by Naomi Abarrondo)
Catalysing Investment in Africa’s Value Chains through Industrial Park Development
(Date: October 19, 2023 Time: 10:00-11:00)

Organised by the United Nations Industrial Development Organisation (UNIDO), this session touched on Africa’s critical industrial development areas, focussing on creating industrial parks across several sectors, such as agriculture, textile, automobiles, and the like. As African countries actively look into industrialisation, they need much support from governments, banks, and the private sector to realise this. Likewise, there is a trend of imbalance in investments across the continent because of differing contexts and capacities, causing unequal growth in the regional value chain. Nonetheless, Africa has been actively engaging in diversifying local economies and working on intraregional trade and cooperation. The good news is Africa is transforming into an optimal place for investment, which could hopefully push the region to contribute to the bigger global value chain.
Session Highlights
Africa has realised that establishing industrial parks and special economic zones (SEZs) spurs economic growth and FDI. They are making a conscious effort to look into investable sectors such as agriculture, which UNIDO concurred to support and promote. However, the private sector can become conscientious in choosing where to invest because of the following considerations: economic and financial return. Factors such as market demand, location, energy, and local currency strength are vital for investors. Thus, private sector feedback must be highly considered.
Investor decisions could also be dynamic because of the rapid change in emerging markets. Soft infrastructure challenges, such as licences, permits, and visas could be elements to continue or withdraw investments. From a development financial bank perspective, they are actively studying the segments of the value chain that are beneficial for the continent. For them, policies must be export-oriented to gain intended benefits, and collaborating with governments to develop such policies is crucial.
Investors also look into government and private companies’ capacity to run industrial parks before agreeing to public-private partnerships (PPPs). It was suggested that initiatives could be phase-by-phase approach starting with public sector-led, meaning governments bolstering their policy regulations first. This initial phase would be followed by private-sector partnerships by assisting them in building infrastructure and developing human capital. The private sector argues that they must ensure that developing countries in Africa are ready before being investable.
There are also success stories in several countries, such as Morocco, Nigeria, and Ethiopia, where financial institutions, governments, and the private sector work on deals that are achievable and equitably beneficial. Intraregional trade remains a challenge because importation is easier from other continents rather than within Africa. There is a proven large manufacturing commodity with little export, and the way to go is through SEZs and industrial parks. Banks are partnering with potential countries in developing intraregional linkages by promoting liberal and sustainable policies.

  • Abimbola Olufore Wycliffe, Head, Investment and Technology Promotion Office, UNIDO
On the Panel were:
  • Gunther Beger, Managing Director Directorate of SDG Innovation and Economic Transformation, UNIDO
  • Fatima Farouk Elsheikh, Strategic Advisor to the Director General, Arab Bank for Economic Development in Africa
  • Kazuhiro Numasawa, Manager, African Development Bank Group
  • Abah Ofon, Senior Manager, Export Advisory, African Export-Import Bank
  • Ronald Philip, Senior Director, Strategic Planning, Logistics Parks, Agility
  • Abimbola Olufore Wycliffe, Head, Investment and Technology Promotion Office, UNIDO
(Reporting by Hannah Gabrielle Tejoso)
Investment Facilitation: International Policy Developments
(Date: October 19, 2023 Time: 10:45-12:45)

Investment facilitation policies are advancing worldwide through international, regional and bilateral initiatives. At the international level, there is the Investment Facilitation for Development Agreement in the context of the WTO. At the regional level, there is the adoption of investment governance instruments, such as the AfCFTA Investment Protocol, the ASEAN Investment Facilitation Framework, and the Intra-MERCOSUR Cooperation and Facilitation Investment Protocol. At the bilateral level, the Cooperation and Facilitation Investment Agreements (CFIAs) concluded by Brazil and the Angola–EU Sustainable Investment Facilitation Agreement are notable examples.

New-generation IIAs are increasingly embracing proactive promotion and facilitation measures, including specific commitments to transparency and regulatory coherence. These features are accompanied by reformed provisions intended to safeguard the right of host States to regulate in the public interest. The session unites key actors in investment facilitation: governments, development partners, private sector representatives, and regional/international organisations. Its goal is to analyse global trends and challenges in investment facilitation policies for sustainable development. It highlighted strategies and innovative approaches to align investment facilitation provisions in instruments such as IIAs to attract sustainable investment and promote sustainable development.

Session Highlights
New-generation IIAs are increasingly embracing investment facilitation features. These features are becoming more common, diverse and specific, with prominent examples across all continents. Over half of all recent IIAs contain transparency requirements for investment measures and the share of other investment facilitation provisions related to the country’s regulatory environment is also growing.

While old-generation IIAs were typically seen as one-off deals, the share of IIAs that set up an institutional framework for cooperation has increased substantially. Over 70 per cent of IIAs signed since 2020 include such an institutional mechanism. While virtually absent in the past, over 30 per cent of new generation IIAs contain commitments on the part of States for stakeholder engagement, including through the right to comment on proposed regulatory measures or the establishment of a focal point with competencies related to investment. Some new-generation IIAs also contain references to technical assistance or facilitation measures targeted at investment for sustainable development.

Yet, much more is needed. Save for a few exceptions, new IIAs continue to lack clear and proactive investment facilitation commitments specific to sustainable investment or the necessary level of technical assistance and capacity-building for developing countries.

During the conference, one of the panellists highlighted the importance of domestic best investment practices for fostering FDI. The panellist stressed the significance of open and transparent negotiation processes during FDI agreements, emphasising the need for an inclusive approach where both parties can participate. To attract FDI, the panellist advocated for a strong focus on investment facilitation, streamlining processes to make it more enticing for foreign investors.

Furthermore, it was suggested that FDI agreements should specifically outline the terms of investment, excluding market access, to ensure that the scope of the agreement remains clearly defined. These insights shed light on the pivotal role of FDI in economic growth and the crucial steps that must be taken to create an investor-friendly environment.

One of the panellists introduced a fascinating concept for Brazil's foreign policy: a bilateral Brazilian model with a central focal point on cooperation. This novel approach calls for Brazil to shift its perspective and promote both bilateral and regional cooperation. The idea behind this model is to create a multilateral structure that fosters facilitation among nations. By emphasising cooperation as a central pillar, Brazil aims to strengthen its diplomatic ties and leverage its position on the international stage. This innovative approach is a testament to the nation's commitment to evolving its foreign policy strategies and playing a more active and constructive role in global affairs. It represents a promising direction for Brazil's diplomatic endeavours, emphasising a collaborative and cooperative framework that could have far-reaching implications.

In the panel discussion, an expert sheds light on the critical significance of investment facilitation in Saudi Arabia and its potential to create a more favourable investment climate. The panellist highlighted that by leveraging digital and online platforms, the Kingdom can streamline administrative processes, reduce red tape, and offer investors a more efficient and transparent experience. This not only contributes to a better investment climate but also aligns with the broader investment facilitation policy objectives.

Moreover, the discussion emphasised the need to revitalise the IIA regime to ensure that it remains relevant and attractive to both local and foreign investors. By embracing investment facilitation practices, Saudi Arabia is not only poised to attract more investments but also to establish itself as a dynamic and progressive destination for businesses seeking growth and opportunities in the region.

During the discussion, a prominent expert provided insights into the critical aspects of aligning investment facilitation policies at various levels to achieve maximum impact. The expert highlighted that harmonising international, regional, and bilateral policies is key to fostering a conducive investment climate. To ensure that these policies lead to sustainable investments, options, such as incorporating environmental and social safeguards, and promoting responsible business practices were highlighted.

Furthermore, the discussion turned to strengthening the technical assistance and cooperation aspects of investment facilitation commitments. The panellist stressed the need for international cooperation, capacity building, and knowledge sharing to assist countries, particularly those with limited resources, in effectively implementing these policies.

Lastly, the expert discussed the role of investment facilitation provisions in reconceptualising the IIA regime to meet global objectives and challenges. By incorporating principles of transparency, inclusivity, and a balance of investor rights and host state responsibilities, IIAs can be modernised to align with contemporary investment needs and global sustainability goals. This multifaceted approach to investment facilitation signifies a holistic strategy that, when executed effectively, can pave the way for more responsible and sustainable investment practices on a global scale.

Speakers of the Session were:

  • Philip Fox-Drummond Gough, Director of the Department of Economic Policy, Finance and Trade in Services, Ministry of Foreign Affairs, Federative Republic of Brazil
  • Sofia Boza Martinez, Ambassador, Permanent Representative, Permanent Mission of Chile to the WTO
  • Jung Sung Park, Ambassador and Deputy Permanent Representative to the WTO of the Permanent Mission of the Republic of Korea
  • Abdullah Alomair, Executive Director, International Partnership, Ministry of Investment, Kingdom of Saudi Arabia
  • Roslyn Ng’eno, Senior Investment Expert, African Continental Free Trade Area Secretariat
  • Tai Hiong Tan, Head of Services and Investment Division, ASEAN Secretariat
  • Chantal Ononaiwu, Director, External Trade, Caribbean Community and Common Market Secretariat
  • Martin Dietrich Brauch, Lead Researcher, Columbia Center on Sustainable Investment
  • Juri Suehrer, Director, Trade and Investment, PwC Middle East
  • Makane Moise Mbengue, Professor of International Law, Director of the Department of International Law and International Organisation, University of Geneva
  • Tania Ghossein, Senior Private Sector Specialist, Investment Climate Unit, World Bank Group
  • Richard Bolwijn, Head, Investment Research Branch, UNCTAD
(Reporting by Rifa Kabeer)
Transferred Emissions: Guidelines for Responsible Sales of Upstream Fossil Fuel Assets
In partnership with the Columbia Centre on Sustainable Investment (CCSI)
(Date: October 19, 2023 Time: 14:00-15:30)

This session deliberated on the implications of transferred emissions on global decarbonisation. By divesting from upstream fossil fuel assets, companies appear to align with net-zero goals, but this does not always result in true emissions reductions. Furthermore, sales often transfer these assets to smaller entities, which are less transparent. This makes it harder for the public and investors to apply decarbonising pressures.

Drawing from key findings of the CCSI and UNCTAD’s World Investment Report 2023, the session highlighted the challenges posed by transferred emissions. These studies emphasised the need for enhanced transparency in carbon accounting and the role of private investors in asset acquisitions. The aim was to educate policymakers about this emerging issue and propose potential solutions for both domestic and international arenas.

Session Highlights
During the conference, the concept of transferred emissions (TEs) was discussed in detail. It was highlighted that TEs remain emissions, highlighting the urgent need for enhanced transparency and stringent carbon accounting in fossil fuel asset sales. TEs are emissions that shift as oil and gas companies, in their endeavour to align with net-zero goals, deny heavily polluting or underperforming assets. These assets are typically sold to sellers who often face less public scrutiny.

Prominent supermajors involved in such practices identified during the conference included Chevron, ConocoPhillips, ExxonMobil, and Total Energy. Two core challenges highlighted were that these sales cloud the greenhouse gas (GHG) emissions landscape due to issues with transparency and data accessibility and the need for regulators to mandate asset-specific, disaggregated emissions disclosures, going beyond general ‘materiality’ requirements.

Existing corporate disclosure standards fall short in tracking fossil fuel asset sales. Upstream fossil fuel asset sales, common among supermajors, have led to significant offloading of GHG emissions. These sales do not merely shift GHG emissions but can amplify them. Assets sold by supermajors often land in the hands of companies with poorer environmental track records. Regulatory reforms, rooted in current GHG emissions accounting frameworks, necessitate significantly enhanced transparency.

It was noted that between 2017 and 2021, major oil companies frequently sold gas assets. A noticeable lack of transparency was observed, with over half of these transactions missing crucial data. Disturbingly, assets were often acquired by companies demonstrating minimal environmental commitment.

Draft Principles that were proposed in the sessions were:

  1. Strengthening domestic legal and institutional frameworks
  2. Promoting early retirement and decommissioning of assets
  3. Enhancing GHG accounting and disclosure
  4. Decommissioning strategies
  5. Fostering international cooperation
The proximity of the 1.5-degree target was emphasised, with fossil fuels pinpointed as a principal contributor. The ‘Beyond Oil and Gas Alliance (BOGA),’ initiated by the Danish government, was showcased as a step forward, advocating for a shift from fossil fuels and promoting renewable energy. Although only 21 members have joined BOGA, there was a strong appeal to ramp up private sector involvement. The conference also touched upon the strategy of carbon taxing, proposing costs on emissions to incentivise cleaner operations. The Sustainable Path to Investment (SPTI) was highlighted as a guiding framework for diverse sectors, outlining how to achieve net zero by diversifying energy sources, reducing operations, transitioning to a circular economy, and implementing strategies like carbon capture. A significant proposal was to link emissions directly to the original emitter and mandate reporting at the time of asset sale.

On the Panel were:
  • Jack Arnold, Programme Associate, CCSI
  • Arjun Flora, Director, Financial Analysis, Institute for Energy Economics and Financial Analysis
  • Melody Ma, Global Head of Policy & Regulatory Affairs, Head of Legal MENA, AirCarbon Exchange
  • Jonny West, Architect, Global Registry of Fossil Fuels, Carbontracker
  • Hanane El Ghiouane, Senior Commercial Advisor Greenbuild, Energy & Environment, Royal Danish Consulate General
  • Martin Dietrich Brauch, Lead Researcher, CCSI
(Reporting by Nahom Kiflemariam Abraham)
GST - Showcasing Reforms for SDG Investment (Session I): Experiences from Togo and the West African Economic and Monetary Union (WAEMU)
(Date: October 19, 2023 Time: 14:00-16:00)

This session centred around top public officials from Togo and the WAEMU and their investment policy reform initiatives aimed at improving the local business climate. The panel focussed on presenting policies designed to attract and increase both domestic and foreign investments which would contribute to fulfilling national developmental goals and contribute to achieving the UN SDGs.

Session Highlights
Togo officials presented the strong points of their country, as well as the policy reforms that they have made and continue to make to attract foreign private investments to the country, as well as to continue their efforts in aligning with the UN SDGs. The panellists stated that Togo is a country with a stable political and socioeconomic environment that continues to strive to reform policies to accelerate the efficiency of public investments that are channelled into development in infrastructure, industrialisation, and other industries.

The country has also established a modern legal framework that allows for benefits such as tax advantages for businesses interested in establishing locations in Togo. This framework has three parts:

  1. An industrial free zone which is eligible for those that export goods and services
  2. A free zone law on the textile industry to encourage international companies to work with the country’s textile industry
  3. An investment code which gives priority to nationals for many of the country’s permanent jobs so they are not left behind
Additionally, the Togolese government seeks out private sector partners that will collaborate with them in pursuing sustainable projects. The country was deemed the Top 3rd reformer in 2020 by the World Bank and the Togolese private sector is marked by an increase in the number of new businesses that they are looking to increase by promoting the country’s business-ready environment.

Moreover, the country plans to take advantage of the vibrant resources that Togo has to offer but is going about these plans in a way that aligns with the UN SDGs. This commitment to sustainability is at the forefront of their vision for Togo’s national development, wherein their roadmap states that Togo aims to be a modern nation that is inclusive and sustainable in the way it goes about its pursuit of economic and social growth. The country also commits to establishing sustainable sources of energy through hydroelectric power plants as well as solar power plants, of which many are already built.

The panel also included companies that established locations in the country and reiterated how the country’s good governance and dynamic human resources made it a viable place to attract businesses. The country is also consistently developing infrastructure, partly to encourage the growth of its tourism sector as well.

The panel of officials expressed their great enthusiasm for inviting private companies to invest in their country as they continue to strive for sustainable economic development. At the same time, the country is open to tourism opportunities in their holistic and inclusive approach to economic development.

On the Panel were:
  • H.E. Manuella Modukpe Santos, Minister of Investment Promotion, Republic of Togo
  • Kuamivi Esseh-Yovo, Director of Planning, Statistics and Monitoring-Evaluation, Ministry of Investment Promotion, Republic of Togo
  • Rodrigue Akue-Atsa, Advisor to the Minister of Investment Promotion, Republic of Togo
  • Habibatou Emmanuelle Thiam, Director, Business Environment, Agence de Promotion des Investissements et des Grands Travaux, Senegal
  • Nikhil Gandhi, Executive Director and Chief Business Officer, ARISE Integrated Industrial Platforms
  • Ousmane Koné, Resident Representative in Brussels of the WAEMU Commission
  • Thierry Badou, Director, Investment Attraction, Centre de promotion des investissements en Côte d’Ivoire
  • Mambila Bansé, Director General, Agence Burkinabé des Investissements, Burkina Faso
  • Eric Akouté, Director, Department of Research and Support to Investment Projects, Agence de Promotion des Investissements et des Exportations, Benin
  • Chantal Dupasquier, Chief, Investment Policy Review, Division on Investment and Enterprise, UNCTAD
(Reporting by Naomi Abarrondo)
Investment Facilitation: National Success Stories
(Date: October 19, 2023 Time: 14:15-16:15)

Sustainable development requires investment facilitation. Countries are beginning to acknowledge that they must create avenues for international and local investment flow to happen, and this requires governments to provide reliable information to investors, make rules and regulations transparent and aligned to global standards, and streamline administrative procedures in managing and creating enterprises. Presently, countries are becoming more active in regional and bilateral level discussions– even a country’s initiatives in realising investment facilitation. Remarkably, country digital information portals grew from 130 to 160, and single windows increased from 29 to 75 over the past five years. This session laid down success stories, lessons, and challenges in fostering investment facilitation in the developed and developing world.
Session Highlights
UNCTAD presented key trends in national investment facilitation policies, which are as follows:

  1. Investment facilitation measures are on the rise - there is a paradigm shift in investment regulation where the share of more favourable investment was declining, specifically in 2021. This exhibited increased attention to investment policies as a tool for industrial development (i.e., FDIs).
  2. Investment facilitation prevails across regions - the notable difference is seen between Asia and Africa, where Asia maximises liberalisation of procedures rather than incentives, while the opposite is true for Africa.
  3. Investment facilitation policy measures highly focus on streamlining procedures, while the establishment of investment promotion agencies (IPAs) is the least focus.
  4. E-government solutions are underutilised as preferences are still on non-digital measures.
  5. Digital information portals and single windows are on the rise.
UNCTAD is actively engaging with governments and enterprises through business facilitation programmes currently present in 15 countries, hoping to add 12 more by 2024. This framework also emphasises green energy, pharmaceuticals, and agriculture in investment facilitation. Moreover, this includes investment policy review programmes, legal frameworks, and other possible e-government solutions. Countries represented in the panel shared their initiatives in applying digitalisation in their frameworks, and the results garnered throughout the process.
Mali, known as the third largest gold producer in Africa, provides a competitive investment climate for investors where they created non-discriminatory policies, ensure the repatriation of profits, encourage 100 per cent foreign ownership, secure protection against expropriation, and acceding to global investment agreements that strengthen investor security. They also made sectorial laws giving incentives in several industries (i.e., mining and oil, agriculture, housing, and solar energy). They support business creation by inventing a one-stop shop for investors with dedicated investment acceleration and monitoring services. This allowed fast and low-cost business registration for local and foreign investors. Digitalisation greatly benefited Mali by opening opportunities for inflow that decreased corruption and increased investor security.
On the other hand, El Salvador focuses on facilitating the establishment, operation, and expansion of multi-sector private investment (i.e., local and foreign). They did this by establishing a digital single-window platform by the Ministry of Economy and their new agency for investment facilitation. This produced simplification of procedures and processes for emerging enterprises. The country also promoted innovation and technology through a manufacturing law to elicit investment flows. This yielded partnerships and agreements with Google and the establishment of technological parks by 2024. These reforms allowed El Salvador to become the technical hub of Central America.
Next, Burundi also started shifting from physical to digital. They created a digital one-stop-shop that allows the business creation process to happen in 24 hours compared to 14 days at maximum if done physically. This notably lowered cost and time for both governments and enterprises. Ironically, many stakeholders resisted these reforms, but UNCTAD readily supported Burundi with financial and technical assistance. Remarkably, a year later (2023), there was a 185 per cent increase in enterprise openings.
Mexico continues to attract investors because of its active involvement in free trade and investment promotion and protection agreements. This opened a 1.3B market for them, and as of June 2023, they became the main trading partner of the US. They are also economically stable, as evidenced by their currency power, and they have diverse strategic industries optimal for investment (i.e., electrical, semiconductor, automotive, etc.). Moreover, they possess a geostrategic advantage that connects them to Europe, South America, Asia, and the US at an efficient time. They also have a digital one-stop-shop pioneered by the private sector, however, they recognise that the government should spearhead this platform. That is why, in partnership with UNCTAD, they are creating a digital platform for investors and coordination of the federal governments, states, and local governments in Mexico. 
Lastly, Columbia is notably conscious of their climate change policy, which translated to reforming their digital platform to report enterprise greenhouse gas (GHG) emissions. They believe this will allow them to achieve climate goals, sustainable development, economic agenda, and trade and investment. They fused their one-stop shop with metrics that report consumption and emissions that show implications for the business and environment. However, they are still developing the platform with the UNCTAD and are showing substantial progress. They are also taking into account the technical and legal aspects of this platform.
Overall, the session covered the following: ownership, scalability and impact issues. On ownership issues, it was clear that these digital platforms must be under government jurisdiction to secure long-term sustainability and hopefully provide robust data protection. Likewise, countries are not advised to transition to digital instantly; the transition should still include physical platforms because these digital portals must compete with it and show palpable results compared to physical ones. Lastly, these platforms are expected to expand and cover the entire business life cycle and public administration. A lot still needs to be done, but the progress is already applaudable and buildable for the following years.
Speakers of the Session were:
  • Pedro Manuel Moreno, Deputy Secretary-General, UNCTAD
  • Iraís Barreto Canales, Head of The Global Economic Intelligence Unit, Mexico
  • Cherif Ben Alwata, Chief Executive Officer, Investment Promotion Agency, Republic of Mali
  • Marco Murcia, Climate Change Advisor, Ministry of Environment, Colombia
  • Didace Ngendakumana, Chief Executive Officer, Investment Promotion Agency (ADB), Burundi
  • Clarissa Valdebran, Director of The Office of Investment, Ministry of Economy, Republic of El Salvador
  • Massimo Meloni, Senior Investment Policy Expert, Investment Policies Branch, DIAE, UNCTAD
  • Ian Richards, Economic Affairs Officer, Business Facilitation Section, Division on Investment and Enterprise, UNCTAD
(Reporting by Hannah Gabrielle Tejoso)
Talking Business (Session IV): Green Economy
(Date: October 19, 2023 Time: 16:30-18:00)

This session highlighted the intricate interplay between the private sector and government representatives as they delved into their experiences surrounding investments in the green economy. The discourse centred around the pivotal questions of identifying opportunities and challenges within the green economy, particularly against the multifaceted backdrop of the COVID-19 pandemic and ongoing climate change crises. A recurrent theme addressed how ongoing health and environmental challenges have reshaped strategic priorities and the need for comprehensive policy reforms to drive sustainability.

The participants also underscored the value of collaboration – both public-private and private-private – to advance sustainable goals. Throughout the session, there was an emphasis on the interconnectedness of green economy initiatives, the Sustainable Development Goals (SDGs), and the overarching principles of Environmental, Social and Governance (ESG) standards.
Session Highlights
The convergence of the digital and green economies was underscored in the session. Advances in technologies, notably the AI metaverse, were cited as catalysts driving green initiatives. This fusion was highlighted as a significant driver for job creation, with new roles emerging that challenge conventional domains, especially in sectors like banking.

Participants underscored the urgent need to transition from fossil fuels, spotlighting renewable energy as the future. Advocacy and awareness campaigns were recognised as crucial in fostering an environmentally conscious culture. Furthermore, the imperative for a unified regulatory framework spanning multiple nations lies in its potential to harmonise and standardise global green initiatives. Governments' roles were identified as paramount. Their responsibilities span from providing tax breaks and incentives to start-ups to ensuring a conducive environment for green transitions. The relationship between political stability and a thriving green economy was underscored, establishing political equilibrium as a precursor for successful green initiatives.

The start-up ecosystem, particularly green start-ups, was brought to the forefront. Established entities like Masdar were cited for their local and global investments in green start-ups. The transition to green practices offers businesses a fresh strategic edge, reducing competition and enhancing brand value. The significance of partnerships was highlighted, emphasising the opportunities that arise when startups collaborate with established firms. The session saw repeated calls for a collaborative approach. Partnerships between big companies, startups, governments, and communities were seen as the path forward.

Trinidad and Tobago were spotlighted for its environmental challenges, notably high temperatures and hurricanes. Despite these adversities, the country has set ambitious targets, including transitioning 30 per cent of its energy sources to renewables. Strategies, such as waste characterisation and the exploration of green hydrogen as an energy source were discussed. Real-world challenges faced by countries, like Trinidad and Tobago, were discussed, emphasising the importance of setting and working towards tangible goals, such as waste management and renewable energy targets.

The session concluded with a forward-looking perspective. The role of governments in collaboration with the private sector was reiterated. Emphasis was placed on ensuring resources, both financial and knowledge-based, were effectively allocated to foster the green economy. The participants expressed optimism, citing various global initiatives and efforts pushing for a sustainable future.

Speakers of the Session were:

  • Muna Kassim, Power Advisor of National Investment Commission, Iraq
  • Sekou Alleyne, President, Invest Trinidad & Tobago
  • Patricia Gimenez Marti, Environmental and Social Manager, Alcazar Energy
  • Oliver Baillie, Chief Executive Officer, Plain Tiger
  • Tawheed Bashar, Co-Founder, Eco Genius
  • Maher Al Kaabi, Advisor, Al Serkal Group
  • Aref M.Y. Abdelrahman Al Farra, Economic Advisor, Abu Dhabi Chamber of Commerce and Industry
(Reporting by Nahom Kiflemariam Abraham)
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