A group of business leaders have written to Boris Johnson asking him to commit the UK to developing a net zero financial system ahead of this year’s COP26 climate summit.
The letter, which has been seen by City A.M., said that such a move would allow the Britain to show off its global leadership before the crunch talks kick off in Glasgow in November.
“It is clear that a net-zero financial system—when the financial system achieves net-zero and finances the net-zero transition in the real economy—is a vital requirement for achieving the Paris Agreement and for delivering the government’s agendas of building back better, net-zero, and levelling up”, it read.
“We believe that the UK, the first major economy to commit to net-zero, can make history again by committing to achieve a world-leading net-zero UK financial system.”
The letter’s signees, which include the chief executives of Aviva, Legal & General, Fidelity Internationl and Jupiter Asset Management, said that Johnson should make the pledge before June’s G7 summit in Cornwall.
They said that ministers could then use the summit to push for a G7-wide commitment to the goal, and create a taskforce to push the mission forward.
“The present moment is ripe for such visionary steps in the run-up to Glasgow,” it read. “The extraordinary moment we face, at the convergence of the climate emergency, Covid-19, and economic crisis, demands extraordinary leadership, innovation and collaboration from us all.”
The letter, which was co-ordinated by climate change think tank E3G and also sent to COP26 president Alok Sharma, chancellor Rishi Sunak, and Mark Carney, Johnson’s COP26 finance adviser, comes as the government faces increasing pressure to step up its regulation of the financial industry.
It has already pledged to cease funding overseas fossil fuel projects, a move which a number of European countries have copied.
Last week MPs called for ministers to stop firms from “greenwashing” consumer financial products amid a string of protests against big lenders.
Many banks have already unveiled climate pledges, but still lend substantial amounts to fossil fuel projects around the world.
The Treasury is in the process of completing its net zero review, which will show how the costs of the UK’s push towards a carbon neutral economy will be borne.
It comes after Johnson last week committed the UK to reducing emissions by 78 per cent on 1990 levels by 2035, in line with the Committee on Climate Change’s recommendations.
A Government spokesperson said: “The UK was the first major economy to commit to net zero by 2050 and we’re harnessing the power of the financial system to help us achieve that.
“That includes making climate disclosures mandatory across the economy by 2025, requiring our financial regulators to take our net zero commitment into account, announcing plans for the UK’s first ever green bond and setting up a UK Investment Bank which will unlock investment in the transition to net zero.”