Every private finance decision must take into consideration climate change and how to decarbonise the planet economy to net zero, incoming UN special envoy on climate action Mark Carney has told banks and investors.
Setting out ways of mobilise private finance in front of the UN climate talks in Glasgow, or Cop26, Carney said such investments “could become the greatest commercial opportunity of our time”.
“The objective for that private finance work with Cop26 is straightforward,” he explained, “to make sure that every private finance decision takes global warming into consideration.”
Appointed special advisor on climate finance to UK prime minister Boris Johnson, Carney, outgoing governor from the Bank of England, made the remarks at the heart of the City of London on Thursday.
“Achieving net zero emissions will require an entire economy transition – every company, every bank, every insurer and investor will have to adjust their business models,” he added.
“This could turn an existential risk in to the greatest commercial opportunity in our time.”
Carney asserted achieving a whole economy transition wasn't “about funding only deep green activities or blacklisting dark brown ones”. “We need fifty shades of green to catalyse and support all companies toward net zero,” he said.
Finance has been identified as a vital priority along with a cross-cutting theme of Cop26 by the UK presidency, which said it can help deliver all other objectives.
Rich countries have promised to mobile $100 billion per year by 2023 to assist developing countries curb emissions and deal with climate impacts. Huge investments are still needed to deliver that goal.
At the UN climate talks in Madrid in December, China, India and Brazil insisted the delivery of the commitment would be a precondition for any discussion on enhancing their climate pledges.
Countries they are under pressure to submit tougher 2030 climate targets and publish long-term decarbonisation strategies prior to the oncoming of Cop26.
Cop26 president and the UK minister for business, energy and industrial strategy, Alok Sharma, told the town audience “unleashing the finance that will power the shift to a zero-carbon economy” needed to be the focus within the run-up to conference.
Sharma quoted Organisation for Economic Co-operation and Development (OECD) estimates that found nearly $7 trillion each year through the next decade was needed to meet both temperature targets from the Paris Agreement and also the Sustainable Development Goals (SDGs).
“Much of this funding needs to come from the private sector,” he said, noting the important thing role of Multilateral Development Banks (MDBs), such as the World Bank. Carney added the united kingdom asks MDBs to “develop robust implementation plans” aligned using the Paris Agreement before Cop26.
Christine Lagarde, president of the European Central Bank (ECB), decided on the vital role central banks needed to play in front of the summit. But she called around the financial sector to re-think “the principles that have constantly applied” to the economic climate.
“We can all make a move. And in doing this you begin questioning the usual understanding, the ways things have been done,” she said.
Lagarde warned that prompt commitments by governments to ramp up ambition was essential to deliver “a smooth transition for the economy”.
“But in the event that intervention is delayed the reduction in emissions might have to be sharper, faster, producing a disorderly, disjointed and more disrupted transition for the economy,” she said.
Ahead from the summit, Sharma also said the united kingdom will support “private sector coalitions” to recognize the climate impacts of their portfolios and loans.
This comes after Nigel Topping, britain's climate action champion, told Climate Home News he'd focus on building coalitions of ministers and non-state actors to bring about “tipping points” for alternation in specific sectors.
These coalitions will result in “big announcements” at Cop26, he explained.
