COP26 Day Three Summary – 3rd November 2021

COP26 Day Three Summary – 3rd November 2021

The World Leaders Summit has come to an end and COP26 moves onto themed days with negotiations continuing in the background. Wednesday was Finance Day, where money is brought to the forefront highlighting how the financial system will aid the environment and climate. 

Last month it was confirmed by the Treasury that large firms in high emission areas will be required to create and publish their plans to transition to net zero by 2023.  Yesterday it was announced that the government will release a science-based verification scheme for these transitional plans to avoid greenwashing. The World Business Council for Sustainable Development has requested that the UK try to get such plans from all large businesses by 2025. 

Over the last year, the UK released two packages of £10 billion and £6 billion as its first green gilts and

it was ledged that any returns of these contributions to Climate Investment Funds (CIF) will be put towards more green bonds. The potential from these CIF returns is around £22-£51 billion. 

After years of work, the International Financial Reporting Standards Foundation Trustees have launched an International Sustainability Standards Board to create a baseline globally for sustainability disclosures that will meet investors demands. The Board hopes to help investors and stakeholders compare sustainability and risks among companies, though they have admitted that varying voluntary disclosure guidelines have made it difficult to make the necessary comparisons. 

Protestors attempted to bring light to the idea of providing grants instead of loans to developing countries, to avoid putting them in future debts. A large, inflatable version of the Loch Ness Monster was made to represent the “monster-osity of climate debt burden”, the replica organised by the Jubilee Debt Campaign. However, police have seized and impounded the inflatable. The demonstration was supposed to be further protesting for debts to be removed and stopped when it came to climate action in developing countries. “Rich polluting countries created the climate crisis and should take responsibility by cancelling the debts of countries that need it and ensuring climate finance is given in grants, not more loans.” 

Launched in April, the Glasgow Financial Alliance for Net Zero (GFANZ) now accounts for 40% of total financial assets globally which represents over $130 trillion (~£95trn) which are managed by 450 firms over 45 different nations. Members of GFANZ are required to transition to be in line with the Paris Agreement and encouraged to aim for 1.5oC rather than 2oC. Bank of England governor, Mark Carney, claimed there was globally enough money to achieve net zero but also stated that the financial sector needed net zero businesses and projects to invest in. 

Green groups however question whether GFANZ is aligning with the 2050 roadmap, one that came from the Financial Alliance itself, that supposedly only a fraction of their assets actually is aligned with this net zero roadmap. The UN has promised to set up a group of experts to analyse the promises and commitments to see whether they are credible or not, although it is not yet in operation. 

 

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