# COP26 coalition worth $130 trillion vows to put climate at heart of finance
Author:  Pal Sinha, Barnali 
Author URL: https://financedigest.com/author/pal-sinha-barnali
Published: 2021-11-03
Category: NEWS
Category URL: https://financedigest.com/category/news
Meta Title: Global Investors Pledge $130 Trillion for Climate Action
Meta Description: Banks, insurers, and investors commit $130 trillion to fight climate change at COP26, aiming to cut emissions and boost green projects worldwide.
URL: https://financedigest.com/cop26-coalition-worth-130-trillion-vows-to-put-climate-at-heart-of-financehtml

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By Simon Jessop and Andrea Shalal

GLASGOW [(Reuters)](https://www.financedigest.com/uk-retail-sales-rise-by-0-8-in-october-ons.html) -Banks, insurers and investors with around $130 trillion or 40% of the world’s capital at their disposal pledged on Wednesday to put limiting climate change at the centre of their work.

An announcement made at the COP26 U.N. [climate conference](https://www.financedigest.com/one-minute-to-midnight-says-johnson-as-climate-conference-opens.html "“One minute to midnight” says Johnson as climate conference opens") https://www.reuters.com/business/cop in Scotland commits its signatories to assuming a “fair share” of the effort to wean the world off fossil fuels.

A main [aim of the COP26 talks](https://www.financedigest.com/maserati-aims-at-driving-margins-higher-before-any-spin-off-talk.html "Maserati aims at driving margins higher before any spin-off talk") is to secure enough national promises https://www.reuters.com/business/environment/new-promises-glasgow-climate-talks-2021-11-02 to cut greenhouse gas emissions – mostly from burning coal, oil and gas – to keep the rise in the global temperature to 1.5 degrees Celsius.

But how exactly to [meet those pledges](https://www.financedigest.com/japanese-businesses-pledge-uk-investment-ahead-of-sunak-meeting.html "Japanese businesses pledge UK investment ahead of Sunak meeting"), particularly in the developing world — is still being worked out. Above all, it will [need a lot of money](https://www.financedigest.com/why-the-world-needs-more-women-controlling-the-money.html "Why the world needs more women controlling the money") https://www.reuters.com/article/climate-un-money-idAFL8N2RP346.

U.N. climate envoy Mark Carney, who assembled the Glasgow Financial Alliance for Net Zero (GFANZ), [put the figure at $100 trillion of investment](https://www.financedigest.com/10-ways-to-put-together-a-killer-investment-pitch.html "10 WAYS TO PUT TOGETHER A KILLER INVESTMENT PITCH") over the next three decades, and said the finance industry must find ways to raise private money to take the effort far beyond what states alone can do.

The money is here – but that money needs net zero-aligned projects and (then) there’s a way to turn this into a very, very powerful virtuous circle – and that’s the challenge,” the [former Bank of England](https://www.financedigest.com/bank-of-england-fines-former-tsb-executive-over-2018-it-failure.html "Bank of England fines former TSB executive over 2018 IT failure") governor told the summit.

Carney’s comments reflected a problem often cited by investors who, in the face of a myriad of climate-related risks, need to be sure that they are being accounted for in a transparent and preferably standardised [way around](https://www.financedigest.com/5-time-efficient-ways-to-travel-around-the-philippines.html "5 Time-Efficient Ways to Travel Around the Philippines") the globe.

REIMAGINING FINANCE

We [need to reimagine finance,”](https://www.financedigest.com/7-finance-career-options-to-consider-and-what-you-need-to-know-about-each.html "7 Finance Career Options to Consider and What You Need to Know About Each") said Larry Fink, chief executive of BlackRock, the world’s biggest asset manager, which has joined the alliance, adding that the development of vaccines against COVID-19 showed what collective action could achieve.

“We can actually do this for climate, but we can’t just cherrypick and greenwash by asking just the public companies, the convenient companies, to move forward without asking all of society to move forward.”

Kristalina Georgieva, [head of the International](https://www.financedigest.com/the-hidden-financial-woes-of-international-students-heading-for-the-uk.html "The Hidden Financial Woes of International Students Heading for the UK") Monetary Fund, said it was crucial to incorporate climate data into everyday macroeconomic reporting.

Carney has led an effort to ensure that financial [institutions account for and disclose the full climate risks](https://www.financedigest.com/institutional-investors-back-shell-board-lawsuit-over-climate-risk.html "Institutional investors back Shell board lawsuit over climate risk") of their lending or investments, forcing the wider economy to price in costs that until now been largely concealed.

These include not only the direct effects of more frequent extreme weather events, but also costs such as a loss of government subsidies for [fossil fuels](https://www.financedigest.com/bank-finance-for-cleaner-energy-grows-but-still-lags-fossil-fuels-report.html "Bank finance for cleaner energy grows, but still lags fossil fuels – report"), or the knock-on health and environmental costs of greenhouse gas emissions.

China’s central bank governor, Yi Gang, said Beijing was working on a new monetary policy facility to provide cheap funds for [financial institutions](https://www.financedigest.com/the-future-of-financial-institutions-in-2023.html "The Future of Financial Institutions in 2023") to support green projects, and that the People’s Bank of China (PBOC) and the European Union would soon publish a shared definition of green investment.

And the vice chair of the global [Financial Stability Board, Dutch central banker Klaas Knot, said a mandatory global minimum standard for disclosure of climate risks was now needed for both financial stability and the provision of sustainable finance](https://www.financedigest.com/g7-finance-leaders-pledge-financial-stability-supply-chain-diversity.html "G7 finance leaders pledge financial stability, supply chain diversity").

‘GREENWASHING’

Jane Fraser, CEO of Citigroup, another GFANZ member, said it was remarkable that the initiative would influence $130 trillion in funds, but that it needed [scale to work](https://www.financedigest.com/managing-flexible-working-on-a-global-scale.html "Managing flexible working on a global scale").

“If you don’t work together, you’re going to come up with a lot of nice really speeches, but you’re … in danger of being divorced from reality,” she said.

[Investors are certain to welcome](https://www.financedigest.com/bayer-hits-8-month-high-as-investors-welcome-ceo-change.html "Bayer hits 8-month high as investors welcome CEO change") the launch of a global standards body prevent companies giving a flattering picture of their [climate](https://www.financedigest.com/u-n-climate-chief-says-two-years-to-save-the-planet.html) policies and business practices in what is already a multitrillion-dollar global market for environment, social and governance (ESG) targeted funds.

We are really focused on greenwashing,” said Ashley Alder, chair of IOSCO, the global umbrella body for securities regulators, which helped [set up the International Sustainability](https://www.financedigest.com/big-brands-set-to-miss-plastic-sustainability-targets.html "Big brands set to miss plastic sustainability targets") Standards Board (ISSB).

It’s [super important](https://www.financedigest.com/mickey-mouse-spider-man-super-mario-added-to-russias-parallel-imports-scheme.html "Mickey Mouse, Spider-Man, Super Mario added to Russia’s parallel imports scheme"), and if you don’t have basic information on a globally comparable basis, then you increase the risks of greenwashing enormously.

[Private sector](https://www.financedigest.com/dollar-slides-on-contraction-in-private-sector-activity.html "Dollar slides on contraction in private sector activity") enthusiasm for mobilising climate-friendly investment also requires the assurance that governments are setting emission reduction goals that are ambitious enough to meet the 1.5 Celsius goal – something that is by no means certain to happen by the end of COP26 on Nov. 12.

U.S. [climate envoy John Kerry told a meeting of world mayors the pledges](https://www.financedigest.com/eu-to-urge-big-polluters-to-toughen-climate-pledges-by-cop27-summit-draft.html "EU to urge big polluters to toughen climate pledges by COP27 summit – draft") made so far gave the world only a 60% chance of capping warming at 1.5 Celsius.

He said around 65% of global GDP was now covered by implementable climate [change plans](https://www.financedigest.com/exclusive-olympics-paris-2024-plans-games-relay-changes-fewer-torches-source.html "EXCLUSIVE-Olympics-Paris 2024 plans Games relay changes, fewer torches-source"). “That means 35% isn’t. And we can’t do it without that 35%.”

(Additional reporting by William James, Elizabeth Piper, Mark John and Huw Jones; Writing by Kevin Liffey; Editing by Katy Daigle and Alexander Smith)


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