UN envoy lays out strategy for financing climate battle

Former governor of the Bank of England Mark Carney, who is the UN's special envoy for climate change, laid out a strategy for financing efforts to cut carbon emissions. Photo / AP file

The United Nations' special envoy for climate change laid out a strategy for financing efforts to cut carbon emissions, calling on companies to be more transparent about their efforts and the impact rising temperatures will have on their operations.

Mark Carney, the former governor of the Bank of England, said 126 countries have committed to achieving net-zero carbon emissions, and investors overseeing more than US$140 trillion are demanding that companies do more to assess the risks and opportunities of climate change.

But, he said, more needs to be done to secure the trillions of dollars in private investment needed to slow the rise in global temperatures.

Carney's speech to financial leaders in London comes as the UK prepares to host the next UN climate summit, known as COP26, a year from now in Glasgow.

The summit's goal is to ensure the world meets the Paris climate accord's goal of limiting global temperature rises to no more than 1.5 C.

US President-elect Joe Biden's climate plan could put the Paris Agreement's goal of limiting global warming to 1.5˚C "within striking distance," according to detailed analysis provided by the Climate Action Tracker. https://t.co/dZyrSXCygl

— CNN (@CNN) November 9, 2020

"When the world's governments set the goal of net zero and over US$100 trillion of capital are demanding action, at a minimum, major companies need to disclose whether the assumptions in their financial accounts are aligned with Paris," Carney said. "In other words, are they joining us on the Road to Glasgow or not?"

The comments come at a crucial moment for climate campaigners. The US, which withdrew from the Paris Agreement under President Donald Trump, is expected to rejoin the accord once President-elect Joe Biden takes office.

Carney has long championed the notion that making companies accountable for their impact on the planet is the first step toward reducing greenhouse gases.

He said that companies need to go further by disclosing the risks climate change poses to their businesses and their plans for the future. Investors such as banks, insurance companies and investment funds should also disclose how their choices are aligned with climate goals, he said.

“Countries pouring money into fossil fuels to fight recession”.

So this is what our leaders mean when they talk about a so-called “green recovery” and “listening to the children”.
No one is coming to our rescue.
It’s up to us.
We’re on our own.https://t.co/hop5edk0tG

— Greta Thunberg (@GretaThunberg) November 9, 2020

"Over time, investors won't just judge company transition plans, they too shall be judged," Carney said.

The UK's Chancellor of the Exchequer, Rishi Sunak, said he would force British companies to reveal the impact they are having on the environment as the country moves to meet a net zero target by 2050. Companies will have until 2025 to get in line with the rules.

He also announced plans for "green sovereign bonds,″ in hopes to position the UK as the hub of green finance before COP-26.

Carney also called for the creation of new markets, particularly in carbon offsets, to facilitate investment in the projects needed to meet climate goals, the most cost-effective of which are in the developing world.

UK to make climate risk reports mandatory for large companies https://t.co/jItVUS8quR

— The Guardian (@guardian) November 9, 2020

Carbon offsets occur when a polluter pays someone else to reduce their emissions, then receives credit for those reductions. These credits can then be used to offset the polluter's own emissions, reducing net releases into the atmosphere.

While demand for such offsets is likely to soar as more companies commit to net-zero emissions, this market "barely exists," Carney said.

"Climate change is a global challenge. Much of the critical investment will take place in emerging and developing economies," Carney said. "For this to happen, we need to turn billions of public capital into trillions of private capital.

- AP