COP26 Private Finance Agenda aims 'to ensure every professional financial decision takes climate change into account'
A drive to ensure every financial decision made worldwide takes climate change and the net zero transition into account has been launched today, ahead of the crucial COP26 summit in Glasgow.
The new COP26 Private Finance Agenda - which was unveiled this morning by Bank of England Governor Mark Carney, Sir David Attenborough, and newly-installed President of the Glasgow Summit, Business Secretary Alok Sharma - marks the latest effort from the UK to advance preparations for the crucial global climate summit later this year.
Signalling green finance as a major priority for the UK's COP26 leadership, Carney said the ultimate aim of the new strategy was to build a global framework for reporting, risk management, and returns across the global financial sector to help unlock the trillions of dollars needed to transition to net zero and help achieve the UN's Sustainable Development Goals.
"Given the scale of the climate challenge and the rising expectations of our citizens, 2020 must be a year of climate action where everybody's in, and that includes the world's leading financial centre," said Carney. "To identify the largest opportunities and to manage the associated risks, disclosures of climate risk must become comprehensive, climate risk management must be transformed, and investing for a net zero world must go mainstream."
Carney, who steps down from the helm of the UK's central bank next month to focus on his roles as COP26 Finance Advisor to the Prime Minister and UN Special Envoy for Climate Action and Finance, has had a major role in building momentum for climate risk disclosure among global financial institutions worldwide. As chair of the Financial Stability Board, he helped develop the voluntary guidelines of the Taskforce for climate-related financial disclosures (TCFds) which have since secured the backing of more than 1,000 firms, banks and organisations worldwide.
But Carney said there was a need to ramp momentum much further to make climate risk management and net zero investment the norm across every corner of the financial sector, in order to guard against the "catastrophic business as usual scenario".
He said 2020 offered a window of opportunity for all banks, investors, and businesses to build climate risk management into every single decision they make, and that doing so could turn "an existential risk into the greatest commercial opportunity of our time".
"A whole economy transition isn't just about funding deep green activities or blacklisting brown ones," he added. "We need fifty shades of green."
The COP26 Private Finance Agenda launch comes as the government attempts to get it's preparations for the summit back on track, following a tumultuous start to 2020 which saw Claire O'Neill unceremoniously sacked as president of the event, and widespread criticism levelled at Boris Johnson's government's handling of diplomatic efforts to keep the Paris Agreement on track.
Also speaking at the launch today, Business Secretary Alok Sharma took the opportunity to lay out the UK's five key priority areas for what he said would be "the largest Summit the UK has ever hosted".
He said the government's top priorities for the Summit were to build greater climate resilience in developing countries throughout the world; protect biodiversity and encourage nature based solution to climate change; enhance the shift towards clean energy generation and storage; support the rollout of zero carbon road transport; and "unleash the financing that will allow the shift to a zero carbon economy".
"But to move from billions to trillions we need all finance to move toward the spirit of the Paris Agreement," he said. "The only economy that can survive the worst effects of climate change and continue to deliver growth is a low carbon economy."
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