Glasgow COP26: Financiers with $130-trillion purse make climate vows

Banks, insurers and investors with $130 trillion at their disposal pledged on Wednesday to put limiting climate change at the centre of their work, and got support in the form of efforts to put green investing on a firm footing.

An announcement made at the COP26 UN climate conference in Scotland commits its over 450 signatories, who account for around 40 per cent of the world’s capital, to assuming a “fair share” of the effort to wean the world off fossil fuels.

A main aim of the COP26 talks is to secure enough national promises to cut greenhouse gas emissions — mostly from burning coal, oil and gas — to keep the rise in the global temperature to 1.5 degrees Celsius. But how exactly to meet those pledges, particularly in the developing world — is still being worked out. Above all, it will need a lot of money.

UN climate envoy Mark Carney, who assembled the Glasgow Financial Alliance for Net Zero (GFANZ), put the figure at $100 trillion over the next three decades, and said the finance industry must find ways to raise private money to take the effort far beyond what states alone can do.

“The money is here —but that money needs net zero-aligned projects and (then) there’s a way to turn this into a very, very powerful virtuous circle — and that’s the challenge,” the former Bank of England governor told the summit.

Carney’s comments reflected a problem often cited by investors who, in the face of a myriad of climate-related risks, need to be sure that they are being accounted for in a transparent and preferably standardised way around the globe.

Loopholes

However, others were not convinced.

“These happy headlines conceal a wealth of loopholes and opportunities for backsliding that we cannot afford if we are to avoid climate breakdown,” the Environmental Justice Foundation said in an emailed statement.

“Net zero pledges mean nothing without fossil fuel divestment. Time for financial institutions to put their money where their mouth is and stop funding climate-destroying fossil fuels,” the NGO’s CEO Steve Trent added.

Kristalina Georgieva, head of the International Monetary Fund, said it was crucial to incorporate climate data into everyday macroeconomic reporting. China’s central bank governor, Yi Gang, said Beijing was working on a new monetary policy facility to provide cheap funds for financial institutions to support green projects, and that the People’s Bank of China and the EU would soon publish a shared definition of green investment.

(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)