COP26: Finance

28th July 2021 by Emma Goring

Mobilise finance.

To achieve our climate goals, every company, every financial firm, every bank, insurer and investor will need to change.

Countries need to manage the increasing impacts of climate change on their citizens’ lives and they need the funding to do it.

The scale and speed of the changes we need to make will require all forms of finance:

  1. Public finance for the development of infrastructure we need to transition to a greener and more climate-resilient economy.
  2. Private finance to fund technology and innovation, and to help turn the billions of public money into trillions of total climate investment.

Support for developing countries

Developing countries in particular need support. Developed countries must deliver on their promise to raise at least $100 billion every year in climate finance to support developing countries.

The OECD estimates that $78.9bn of climate finance was mobilised in 2018. This must include building new markets for adaptation and mitigation and improving the quantity, quality and access to finance to support communities around the world to take action on the changing climate.

The UK is doubling our International Climate Finance commitment to help developing nations with £11.6 billion over the next five years up to 2025/2026. We want as many countries as possible to follow our lead and increase their commitment through to 2025.

Unleashing the trillions in private finance

Ahead of COP26, we must work to unleash the trillions in private finance that are needed to power us towards net zero by the middle of the century.

To do this, every financial decision needs to take climate into account:

  1. This includes all private investment decisions, but also all spending decisions that countries and international financial institutions are making as they roll out stimulus packages to rebuild economies from the pandemic.
  1. Companies need to be transparent about the risks and opportunities that climate change, and the shift to a net zero economy pose to their business.
  1. Central banks and regulators need to make sure that our financial systems can withstand the impacts of climate change and support the transition to net zero.
  1. Banks, insurers, investors and other financial firms need to commit to ensuring their investments and lending is aligned with net zero.

COP26 Finance Approach