Green Finance

"Rewiring the entire global financial system for net zero" that’s the pledge from the UK chancellor Rishi Sunak from the COP26 climate conference. While it’s a great headline, the hard work will be in forcing firms to put the interests of the planet before that of making a profit at any cost.

Financial firms that control around 40% of global assets have now agreed to deliver the Paris Agreement of the 1.5C warming limit. Those firms in control $130tr (£95tr) of financial assets.

The chancellor has also promised that the UK will force all financial institutions and stock market listed companies to publish plans on how they will transition to net zero from 2023.

As welcome as these new promises are, there is still concern that developed countries are way behind on their promise to deliver $100bn a year by 2020.

The ongoing issue will be how to get private and public sector funding working together to raise global investment in new technologies and innovation that put the climate ahead of making money for private investors.

Since the Paris Agreement was signed in 2015, UK banks have invested £225bn in fossil fuels.

Banks are willing to make plans to change by 2050, but critics say more should be done now.

COP26 is certainly delivering headlines, the US climate envoy, John Kerry has said that the World has a 60% chance of capping global temperature at 1.5C with the current commitments on cutting carbon emissions. Speaking at the conference, he was emphasised how important it is for the World to hit it's goal of halving emissions in the next ten years.

Mark Carney, the UN special envoy on climate action finance said that 'too many thought this was someone else's problem' and despite the achievements in Paris in 2015, net zero commitments were few and far between.

The former Governor of the Bank of England went on to say:

"We know that only mainstream finance can fund the estimated $100tn of investment needed over the course of the next three decades for a clean energy future."