Global finance industry pledges to help fight climate change


UNclimatechange |

Faeyah Muhammad

The 26th annual United Nations Climate Change Conference took place  from Oct. 31 to Nov. 12 in Glasgow, Scotland.

Nations came together to discuss the rising threat of climate change, its long-term effects and possible solutions.

This time around, the global finance industry addressed the actions it can take to reduce the spread of climate change. The United Nations Glasgow Financial Alliance for Net Zero is a group consisting of 450 banks, insurers and asset managers in 45 countries. Among these are major leading financial firms such as BlackRock Inc., HSBC Holdings plc, Morgan Stanley and Deutsche Bank AG.

This group was organized with the objective of reaching net zero carbon emissions by the end of this century. The steps the group has planned to take toward reaching this goal consist of raising money and allocating it among different initiatives that tackle the implementation of renewables, electrification, efficiency, coal, nuclear and additional innovations through safe climate-friendly processes. As of Nov. 3, the group has committed to using their assets, which are valued at $130 trillion, to implement and reach the net zero emission goal.

To address climate change and counteract it to the best of its ability, the global finance industry needs the collaboration of governments all around the globe. Until regulations prohibiting the practices of corporations that use large amounts of carbon emissions are implemented, emissions will undoubtedly continue. With global government cohesion, the economic systems shaped around the world can adapt and align with climate objectives. This calls for a transformation of currently implemented economic systems but promises a cleaner and safer future for all of the planet.

Mark Carney, former governor of the Bank of England, led the discussion on where funding would come from and how it would be allocated. Carney emphasized the importance of transforming the financial system to align with climate goals. As discussed in the Paris Agreement, analysts estimated that somewhere around $150 trillion needs to be raised to reach the 1.5 degrees Celsius goal countries around the globe promised to reach.

In addition to policy regulations, the allocation of trillions of dollars of capital and the commitment to change, the Glasgow Financial Alliance for Net Zero has also promised to annually report its progress to ensure that significant and proactive measures are consistently being taken. With a budget of this scale and initiative being taken by the global finance industry, governments are going to have to come together to implement policies that make sure this matter is being taken seriously. Since the U.N. group itself is not capable of transforming entire economic systems on its own, the cooperation of global governments is essential.

Overall, significant efforts are being made by several organizations promising fundamental change that will limit climate change and reduce emissions significantly in the next 30 years.