What is finance?
To deliver on the first two goals of mitigation and adaptation, the UK government has said developed countries must make good on their promise to mobilise at least $100bn in climate finance per year by 2020. International financial institutions must play their part and leaders must work towards unleashing the trillions in private and public sector finance required to secure global net zero.
Why is it important?
How will they do this?
Ahead of COP26, they plan to work to release the trillions in private finance that are to work towards net zero by the middle of the century.
To do this, they have outlined how every financial decision needs to take climate into account:
- 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.
- 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.
- 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.
- Banks, insurers, investors and other financial firms need to commit to ensuring their investments and lending is aligned with net zero.
You can read more about why finance is a crucial goal on the COP26 goals website.
