Businesses and households across the world have been hit hard by Covid-19, but as we move to the next phase of recovery from the pandemic, it is vital that we keep the fight against climate change top of the agenda.
That’s why last week, to mark London Climate Action Week, we announced a major summit in November that will focus on the role of green finance.
Organised with the Green Finance Institute and supported by the World Economic Forum, the “Green Horizon Summit — The Pivotal Role of Finance” will explore how the private sector at home and abroad can help raise the monumental amount of capital needed to achieve an orderly transition to a net-zero future, as well as create jobs and revitalise our economy in the wake of coronavirus.
The virtual event will be held between 9 and 11 November — the original dates for the postponed United Nations Climate Change Conference (COP26), which will now take place in Glasgow in November 2021. It will feature keynote addresses from high profile business figures, including Mark Carney, the former Bank of England governor who is now UN special envoy for climate action and finance, and finance adviser for COP26.
The link to COP26 is no coincidence. While it made sense for the conference to be postponed to next year while the world grappled with the Covid-19 pandemic, the fight against climate change cannot be delayed. We must keep up the momentum if we are to realise the UK’s ambition to become net-zero emission by 2050, and support campaigns like the UN’s “Race to Zero” plan.
Green finance is a crucial part of meeting that challenge. The figures speak for themselves. Some $90 trillion is needed by 2030 to realise our international climate ambitions. Meanwhile, over the next three decades, the total required investments in the energy sector alone will be US$3.5 trillion per year, while billions per year are needed to fund carbon capture and biofuel technology.
I am proud to say that the City is already leading the charge in this area. We are world leaders in green finance and efforts to accurately price climate-related risks and opportunities, and last year London came top in the Z/Yen green finance global rankings. The London Stock Exchange is home to more than 200 sustainable bonds which have raised over £40bn.
London’s talent, depth of capital markets, and scale of innovation mean that we are ahead of the game in critical products like transition bonds. But while we may be already leading the way, investors must do more, and all parts of the City must play their part — whether that is through structuring transition bonds, developing new forms of insurance, or building climate-friendly investment portfolios. Asset managers should get on board with schemes like the Transition Pathways Initiative, launched by the Environment Agency and Church of England.
Private sector capital is a major piece of the puzzle for our transition to net-zero. That’s why finance is the cornerstone of the COP26 agenda. And professional services too have a role in developing credible transition plans.
In advance of next year’s event, I hope this November’s Green Horizon Summit will see the global financial community come together to collectively play its part in the fight against climate change. London can truly support a global green recovery.
Main image credit: Getty