Leading financial institutions, including banks, insurers and investors have pledged at COP26 that they will put tackling climate change at the heart of their work.
The news comes in response to the formation of the Glasgow Financial Alliance for Net Zero, which represents 450 global firms and financial institutions with $130 trillion at their disposal and accounts for 40% of the world’s capital.
The Chancellor of the Exchequer, Rishi Sunak, recently announced plans to make the UK the first carbon neutral financial centre by 2050. The goal is for all listed companies to outline publicly by 2023 how they plan to reach net-zero in 2050. These plans will be monitored by the Financial Conduct Authority and failure to produce a plan or deliver on pledge could result in fines.
However, some companies such as mining minerals or batteries may be exempt.
COP26, the UN Climate Change Conference, which is taking place this week in Glasgow, has the goal of trying to secure enough national commitments from both developed and developing nations to cut greenhouse gas emissions and keep global temperatures at 1.5 degrees Celsius.
Yet, a large stumbling block has been securing enough financial support for developing countries to ease the transition from fossil fuels to cleaner energy sources. The figure was estimated to be $100 trillion over the next three decades according to Mark Carney, UN Climate Envoy.
“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”, Carney added.