We are on the ground at the 3rd edition of the Budapest Climate Summit, situated right at the centre of the Hungarian capital. With the continued energy crisis in the background, this year’s Summit focused on the future of the energy system, the industry’s perspective on the shifting climate landscape and unpacked the tools needed for a climate-resilient future – including the EU’s role in the region’s transition and sustainable finance and investment.
The Deputy State Secretary for Climate Policy at the recently-established Hungarian Ministry of Energy, Daniella Deli said that whilst the focus has shifted towards energy security, sustainability is compatible with the shifting priorities, in her view.
Presenting the current climate situation, Diana Ürge-Vorsatz, Vice Chair, Working Group III of the Intergovernmental Panel on Climate Change, highlighted the threat of high temperatures on agriculture and the immediate need for RES. “It is risky not only for those who own these companies but for the whole economy as it might create market instability and macroeconomic instability.”
Moving to a broader EU perspective, the European Commission’s Acting Director General for Climate Action, Clara de la Torre, emphasised once more the importance of a Just transition: “The EU believes in a climate transition that leaves no one behind”. The Acting Director said that the Commission is proposing a new “social climate fund” and highlighted existing funding opportunities such as through the Modernisation Fund, which assists 10 Member States in modernising energy systems, including countries in the CEE region.
The CEO of TESCO’s Central European branch, Matt Simister teamed up with Andreas Beckmann, the Regional CEO of WWF to highlight the key issues and opportunities in sustainable supply chains in the retail industry, following the release of the Living Planet Report 2022 by WWF. Discussing the report, Mr Beckmann said: “Loss of biodiversity is a civilisation challenge” – adding: “Climate change and loss of nature are interlinked. Climate change is a major driver of loss of biodiversity.” As well as food waste.
Mr Simister highlighted TESCO’s sustainability strategy and the company’s food waste and supply chain targets. “We were the first business to independently audit and share our food waste data”, said the CEO. Additionally, Mr Simister emphasised the importance of building partnerships to be successful in achieving sustainable supply chains and highlighted TESCO’s Action Plan for Sustainable Supply Chain predicated on five major action points: cut emissions, end food waste, minimise and optimise packaging, improve supply and change demand.
Providing Shell’s perspective on the green re-shaping of the energy landscape, Mallika Ishwaran said that according to Shell’s analysis, the global Covid pandemic has changed the starting point of the energy transition and the individual responses of the country give an indication of how countries will respond to the climate crisis. On this note, Ms Ishwaran said: “The energy transition is inevitable,” adding that the company seeks to be a “pioneer” in this area.
Other panels focused on the future of transportation and how to reduce emissions from an industry that currently represents as much as a quarter of the European Union’s total emissions. The financial aspect was also highlighted as stakeholders discussed the role of green and sustainable finance in climate change mitigation and the integration of ESG criteria in the investment of financial and corporate actors.
Are we learning from our mistakes?
During an experts’ panel on the future shape of the energy system, all speakers strongly agreed that the future generation is particularly important to consider when taking into account the rationale for achieving sustainability. In terms of ongoing efforts, Zsolt Jamniczky, Deputy CEO of E.ON Hungaria raised major inefficiencies in today’s climate politics, highlighting Germany’s well-known green transformation strategy failure to significantly lower the country’s CO2 emissions levels. In addition, Mr Jamnicky suggested that today’s underdeveloped grid infrastructure is a major roadblock in meeting the 2030 climate targets.
The experts also provided interesting insights into today’s energy crisis and the policy responses many governments have introduced – price caps being one of them. The Vice President for Strategic and International Affairs at the Hungarian Energy and Public Utility Regulatory Authority, Pál Sagvari, said that the biggest risk of such a policy response is that it doesn’t address the root cause of the problems, it hides it. According to Mr Sagvari, such measures can also create security of supply issues, as seen in recent days in Hungary and increase energy consumption, exacerbating the energy shortages. He reiterated that the root cause is scarcity and the cap does not solve it.
In terms of the future approach and mistakes that we ought not to repeat, Zsofia Beck, the Managing Director and Partner at the Boston Consulting Group underlined that adaptation and openness is crucial, emphasising the importance of learning from the mistakes of others. Mr Jamniczky agreed on the need for openness and added that “quick fixes create bigger problems”, suggesting a greater focus on taking a prudent approach.
Gábor Molnár, the Head of Renewable Business Development of MET Group highlighted the importance of decreasing our consumption and the “profound impact” that the sky-rocketing prices are having on the economy and consumers’ choices. “The world has surpassed 1 terawatt (TW) of solar installed capacity level,” he said, “and more than 50 per cent of the growth happened in the last 5 years.”
During a separate keynote speech, Barbara Botos, the Hungarian Ambassador-at-Large for Climate, provided an update on the “climate progress” taking place on the international scale. The Climate Ambassador-at-Large said that participants of COP27 and the commitments made in the past few years “under-estimated the geopolitical considerations” in the process of making the initial targets. In Ms Botos’ view, this is due to the failure to act as a “global family”: “We have to restart wish multilateralism, we have to overcome these challenges,” she concluded.