COP 28 insights: navigating climate strategy in the MENA region 

With Suzan Taha

As the world focuses on the ongoing COP 28, LegalcommunityMENA sits down with Mario Cigno, Counsel at Baker McKenzie Italy, to gain valuable insights into the evolving role of voluntary carbon markets, their impact on legal frameworks, and the climate initiatives vital for businesses in the MENA region.  

In this exclusive interview, Cigno sheds light on the significance of voluntary markets, the role of SMEs in sustainable practices, and the contributions of legal professionals in fostering a climate-friendly environment.  

Read on for a comprehensive discussion on climate strategies, legal landscapes, and the path to a sustainable future. 

How do you envision the evolving role of voluntary carbon markets and their impact on legal frameworks for climate strategy? 

Voluntary carbon markets have an essential role in defining the plan for transitioning toward sustainability for many players. At the same time, they have been subject to criticism mainly regarding their effective contribution to mitigating climate change. 

Regardless of the criticism, I have no doubt about the importance and positive effects arising from voluntary markets’ projects for local communities. Local communities can benefit and take advantage from significant, long-term and durable revenues, which could also be seen as somehow anticipating green finance initiatives. 

I believe that voluntary markets’ projects could provide key tools for developing communities to address the three main risks of climate change, biodiversity loss and humanitarian crises. This will be even more the case if an appropriate regulatory framework is developed and agreed, also in the context of the UN COP28, to provide much-needed clarity and trustworthiness for all stakeholders, including for the purposes of Article 6 of the Paris Agreement. 

Drawing from your legal expertise, can you shed light on the instruments and tools that are essential for SMEs to engage in sustainable practices, and how these align with COP28 initiatives? 

SMEs represent a significant part of the global economy and — consequently — of global emissions. Considering the MENA region, SMEs make up for 90% of total businesses and are responsible for 50% of the related GHG emissions. It is therefore important to make sure that SMEs are not excluded from the sustainable transition. 

Risks and opportunities are two sides of the same coin. For large corporations, sustainability is mainly a risk because of legal and regulatory obligations, and market and stakeholders’ expectations. For SMEs, sustainability can mostly be a huge opportunity. It is a huge opportunity to gain new market shares and to attract new investors: Being sustainable begins to be an unavoidable mantra. After all, we cannot just flip the coin and hope for a natural solution to a human-caused problem. 

It is not a secret that SMEs have limited resources and capabilities and may not have the benefit of being wrong. 

SMEs therefore need to take advantage of the instruments and tools made available by organizations, governments and large corporations, provided that they all have an interest in developing a sustainable environment through their entire value chain. 

For example, the SME Climate Hub looks like an effective tool available for SMEs that intend to establish climate commitments, implement transition strategies and measure 

their progress toward such targets. No less importantly, I understand that it will be freely available for all SMEs in the MENA region (and also in Arabic). 

How are legal professionals contributing to creating an environment that encourages SMEs to adopt climate-friendly practices? What legal challenges and opportunities do SMEs face in aligning with climate initiatives, and how can legal professionals facilitate their integration into sustainable practices? 

On the one hand, legal professionals of SMEs can contribute by providing guidance for the purpose of supporting them on a sustainable path and in the implementation of effective solutions and initiatives aimed at placing the SMEs in the right position toward carbon neutrality. 

On the other hand, legal professionals of large corporations are also somehow contributing to SMEs’ adoption of climate-friendly practices. This is indeed the indirect result of the policies and requirements set forth by large corporations, with the support of their legal team, for their value chains. 

If an SME is required to meet specific requirements and standards to be eligible as a supplier or partner of a large corporation, it must somehow meet those requirements and standards. Failure to comply would not be punished by the law, but rather by the market. Action on climate change is rapidly shifting from a “nice-to-have” marketing advantage to a cost of doing business overall. 

It is also true that there is no single or “right” way to sustainability. Rather, each operator must find its own path (also with the assistance and support of its legal team). 

In the context of COP28, how can legal professionals contribute to enhancing the regulatory landscape to support effective climate strategies, specifically for businesses? How can legal professionals contribute to the regulatory landscape supporting effective climate strategies, particularly for businesses, in the context of COP28? 

One of the main concerns for investors is the lack of a clear legal and regulatory framework for investments. Such unclarity is often due to legislators’ and regulators’ limited experience and knowledge. 

In the context of COP28, legal professionals can help and contribute by sharing the experience and knowhow they have gained on these topics, thereby enhancing the development and establishment of a clear, favourable and sustainable legal and regulatory frameworks, capable of attracting investments. 

With your experiences in Italy, can you share legal best practices that have proven successful in fostering sustainability among SMEs and businesses? 

One of the most promising Italian initiatives of which I am honoured to be an active part and which deserves to be mentioned as best practice, is Open-es. Open-es is an alliance for sustainability that includes industrial players and financial and consulting partners keen to join forces to lead their value chains on a common path of improving sustainability performances. 

Open-es, through a digital platform, connects companies creating a systemic, open and collaborative network, through which participants are able to share best practices, measure their ESG performances and take concrete steps to improve their sustainability profile. 

Open-es was launched by major and leading Italian corporations, which decided to establish, develop and share this open platform with an entire entrepreneurial system. The aim is to provide an innovative tool open to all companies engaged in the challenge of the energy transition and, in particular, to support and facilitate the sustainability journey of SMEs as part of the value chains. 

Considering the MENA region’s role in shaping global climate strategies, what legal challenges do you anticipate, and how can legal professionals navigate them? How do you see the MENA region influencing global climate strategy, and what legal considerations should legal professionals prioritize as businesses integrate sustainability practices? 

The region has a crucial and inescapable role in driving the energy transition and supporting the global commitment to sustainability. The MENA region is a key source of global economic and energy resources. The region has vast oil, petroleum and natural gas reserves. 

The legal challenges will be the same as in rest of the world and will consist of complying with legal and regulatory requirements (such as those imposed by EU legislation, including but not limited to CSRD, CBAM, EUDR and, if approved, CS3D) and meeting other stakeholders’ expectations. 

There is an increasing demand for sustainable and green investments, initiatives and products. This comes from all stakeholders, including investors, consumers and local communities, whose awareness and sensitivity is quickly increasing. 

Legal professionals can support all operators in implementing appropriate policies and strategies without forgetting — rather having this as a priority — that sustainability shall also be sustainable. 

I hope that, with the MENA region’s contribution, our global climate strategy will be clear, effective and sustainable for the benefit of a better and greener future. 

About Mario Cigno 

Mario Cigno is an award-winning lawyer and counsel based in Baker McKenzie’s Italian office, specializing in environmental, healthcare, energy, food, and regulatory matters. He has been recognized and acknowledged for his commendable work in public and administrative law. He is an active speaker in various events and symposia, co-editor of the Italian monthly newsletter on Energy and Sustainability, and author of publications on sustainability and healthcare matters.  

Cigno’s diverse practice includes advising on environmental, energy, and healthcare law, with a focus on managing environmental risks and participating in sustainability and climate change initiatives globally.  

Having obtained a law degree from Bocconi University of Milan, Cigno has been admitted to practice in Milan, Italy, since 2014. Additionally, he completed the Qualifying Course on Sustainable and Renewable Energy at Wolters Kluwer Italia Business School (IPSOA) in 2013. 

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