COP26: UN Special Envoy explains role of business investment in combating climate change

During the COP26, Mark Carney, the UN Special Envoy for Climate Action and Finance, gathered the Glasgow Financial Alliance for Net Zero on Wednesday to align $130 trillion in financial assets with climate goals, as per the reports of UN News. Glasgow Financial Alliance is a group of bankers, insurers and investors who have pledged to place climate change at the centre of their work. 

Carney said that many companies that have plans to cut emissions would be able to raise funds. He recommended making those plans fast. The plan includes a roadmap that requires the corporations engaged, including most of the big Western banks, to follow science-based principles to achieve net-zero emissions by 2050 and commit to interim objectives of 50% reduction by 2030 and even 25% reduction in the next five years. This entails modifying their business models and putting them into action.

"Until today, there was not enough money in the world to pay for the transition"

Private money, according to the Alliance, can help fund private sector projects and turn billions committed to climate investment through public channels into trillions of dollars in total climate investment, according to UN News. However, achieving systemic change will necessitate cross-system collaboration, bold commitments and immediate action. Carney addressed at the COP26 plenary that there was not enough money in the world to pay for the transition until today.

According to Patricia Espinosa, Executive Secretary of the United Nations Framework Convention on Climate Change (UNFCCC), there is no doubt that the global economy must undergo a profound transition, with the private sector playing a key role. She stated that the private sector understands that climate risks are very important for their portfolios and that they need to connect them to a more sustainable manner, according to UN News.

Allianz has pledged its support for the Glasgow Financial Alliance

Allianz, a German international financial services corporation, has pledged its support for the Glasgow Financial Alliance, according to Guenther Thallinger of Allianz. He said that it all starts with them as financial institutions modifying their decision-making processes. On the other hand, Chief Sustainability Officer of Investment banking company Morgan Stanley, Audrey Choi stated that they have essentially laid the groundwork for a new sector, new ground rules for a new industry that prioritises climate action. According to UN News, she further stated that they will be announcing their first round of interim targets very soon.

Image: AP