GLASGOW: A coalition of finance firms managing $130 trillion made net zero pledges on Wednesday and vowed to put the fight against climate change at the center of their work.
An announcement made at the COP26 UN climate conference in Scotland commits its signatories, who account for around 40 percent of the world’s capital, to assuming a “fair share” of the effort to wean the world off fossil fuels.
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.
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.
COP26 President Alok Sharma said there was “big momentum” from the private sector.
But he acknowledged that governments of wealthy nations failed to honor a key pledge to help poorer nations green their energy grids and respond to increasingly extreme drought and flooding.
UN climate envoy Mark Carney, who assembled the Glasgow Financial Alliance for Net Zero, 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.
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.
And the vice chair of the global Financial Stability Board, Dutch central banker Klaas Knot, said a mandatory global minimum standard for disclosure of climate risks was now needed for both financial stability and the provision of sustainable finance.
US climate envoy John Kerry, nearly three dozen large corporations including Apple and Amazon, and the World Economic Forum are launching an alliance to build a market for technologies that generate low levels of carbon dioxide.
The First Movers Coalition announced on Wednesday aims to help companies set their purchasing plans in a way that will “create new market demand for low-carbon technologies,” the World Economic Forum said.