Business leaders can no longer ignore the ‘north-south’ climate divide, top UN official warns

The United Nations’ top corporate sustainability chief warned business leaders they can no longer ignore the growing “north-south divide” on climate change.

Sanda Ojiambo, CEO and executive director of U.N. Global Compact — a body responsible for overseeing business commitments to achieving sustainable development goals — told CNBC’s Steve Sedgewick that “climate has become a political issue,” describing the rift between rich and poor nations as “the biggest chasm.”

Speaking on a CNBC panel discussing the challenges and opportunities for businesses in the pursuit of net-zero climate goals at the World Economic Forum in Davos, Switzerland, the U.N. director warned that divisions between the global north and the global south have created a “tension at a global level” among both business and policymakers.

“You can’t ignore it no matter where you are in the world,” she said.

Climate talks at the COP29 summit in Baku, Azerbaijan, in November ended in acrimony, with developing nations left unimpressed by the rich world’s financial commitments.  

Global south leaders and activists at the climate summit were left angered by a $300 billion finance deal, a paltry commitment compared with the $1.3 trillion needed for climate adaptation.

At one point, delegates from poor and small island nations walked out in frustration over what they called a lack of inclusion, worried that fossil fuel-producing countries were seeking to water down aspects of the deal.

Ojiambo warned of the consequences of divisions and tensions over climate finance.

“It stifles the adequate flow of capital, it stifles technology exchange, it’s broken trust,” she said, warning business leaders that they “can’t ignore the politics” and must instead “work within it.”

Strengthening public-private partnerships with “affordable capital” for “global south” businesses is vital to healing “a fractured world,” added the U.N. boss.

The global south’s “anxiety and angst” are down to its producing “the least amount of emissions” while being “most impacted by climate action,” said Ojiambo.

Climate scientists warn that rising sea levels, frequent cyclones and food insecurity are an existential threat to small island developing nations in the Caribbean and Pacific.

A rise of 1.5 C in global average temperatures would intensify flooding and extreme drought already experienced in Africa, home to 32 of the world’s 48 least developed countries.  

Both scientific warnings and divisions have led the world to a “tipping point,” Ojiambo added.

A report published by the U.N. in 2023 found that G20 countries are responsible for 76% of global emissions.

“If we can get a significant amount of large players to just get us where we need to get to in terms of those targets, that’s one piece. And then we can work on the rest,” she told the Davos panel.

Gender divides could be a major opportunity for business leaders to achieve sustainability goals.

Katherine Garrett-Cox, CEO of GIB Asset Management and chair of CDP Worldwide, a global non-profit, said businesses must apply a “gender lens” to unlocking finance.

“Typically, female-led businesses are more concerned about this topic,” she said, adding that improving investment “would be significant.”

“Gender lens investing is still very nascent,” said Garrett-Cox.

According to gender finance network 2X Global, gender lens investing accounted for almost $8 billion of private market investment in 2023.