Unlocking the $162 billion climate finance opportunity for ‘Corporate Nigeria’

The time has come for ‘Corporate Nigeria’ to divest its interests from the hydrocarbon industry and tap into the  multi-billion dollar climate financing opportunity awaiting local investors who are willing to look into the future that will be dominated by clean technologies and climate finance.

Climate change is already influencing the context in which corporate commercial decisions are made, while presenting both risks and rewards for corporate organizations. In a phone conversation, Stanley Ijeoma, Africa’s foremost enviropreneur and chief executive officer of Schrodinger Greentech Limited, expressed his belief in corporate Nigeria’s capacity to invest in corporate climate change adaptation knowledge management to enable understanding and appreciation of the risks, opportunities and benefits associated with climate change and how climate change is affecting various parts of the economy.

“They need to build their internal capacity, to understand where the risks and opportunities lie, because you cannot address a problem you don’t understand or know where it is coming from,” he explained.

Corporate climate change adaptation via proliferation of climate finance is crucial because most corporate organizations don’t know that their businesses are at risk; climate change is directly and indirectly affecting most organizations.

Ijeoma said that “they are directly and indirectly at risk through their supply chains. We have local regulations and policies that will are coming out soon because there are already some global and regional frameworks in place, so they really have to be proactive.”

Giving an instance, he said that the national climate change legislation that is awaiting presidential assent could impose tax on emissions and other climate infractions.

Also, environmental disasters like flooding and drought are already being experienced in the country, bringing economic activities in some parts of the country down as a result of climate change.

“In 2012, the flood happened, it was so bad that we heard about 22 states were being affected, imagine the cost of that disaster, and at the national level, I know that then President Jonathan had to withdraw the budget proposal sent to the National Assembly because they needed to review the GDP estimate for 2013 downwards,” he said.

However, in 2015, President Muhammadu Buhari submitted Nigeria’s Nationally Determined Contributions (NDCs) to the United Nations Framework Convention on Climate Change (UNFCCC), preparatory to the signing of the Paris Agreement. That committed Nigeria to unconditionally reduce Nigeria’s greenhouse gas emissions by 20 percent and 45 percent with international support and assistance. Nigeria came up with the Nationally Determined Contribution (NDCs) programme which showed that the reduction of greenhouse emissions would benefit Nigeria by $304 billion despite costing $142 billion to achieve this, leaving a net benefit of $162 billion for companies and businesses who would participate in delivering Nigeria’s greenhouse gas abatement commitments that are encapsulated in the Paris Climate Change Agreement.

Clean energy technologies have changed the way energy is being consumed all around the world, as countries deploy electric cars, build wind and solar farms. The world is rapidly changing and countries and companies alike are becoming more socially responsible and are factoring the wellbeing of people and the environment into their bottom lines.

Describing the emerging opportunity as the ‘next big thing’ for ‘Corporate Nigeria’ to focus on, Ijeoma stressed that the financing of climate friendly projects in Nigeria also represents a solution to two major problems namely, inadequate power supply and greenhouse gas emissions.

Nigeria currently suffers from chronic power shortages, which has resulted in stunted economic growth and development.

Ijeoma also said that for a population of over 200 million people, the generation of about 7,000 megawatts (MW) is abysmally low and investment in climate friendly projects like solar systems, biomass plants and wind farms would help alleviate the situation within the shortest time possible.

Even the oil majors like Shell, BP have realized that the tide has turned and are investing heavily in clean energy. Shell has said it plans to increase its investment in renewable energy to $4 billion.

Stanley Ijeoma urged corporate organizations to take advantage of the Climate Change Business Risk Assessment services which Schrodinger Greentech has designed to enable them understand the effects of climate change on their business in particular and how this fits into the national and global economic dynamics. He also advised ‘Corporate Nigeria’ to leverage local and international opportunities in climate finance created by the need to combat climate change.