COP 26: the biggest investment shift, ever
November 5, 2021
This week at COP 26 saw a flurry of landmark achievements for greening the finance sector. The UK has delivered on its promise to make finance one of the core goals of this year’s climate conference, with back-to-back announcements by governments and regulators indicating a major win for responsible investors. This follows the series of policy announcements impacting the financial services sector in the run-up to COP, such as those unveiled in the UK’s ‘green finance roadmap.’
Starting off the week strong, GFANZ chair Mark Carney announced that the alliance has officially gathered US$130 trillion in global capital committed to net zero, up from US$5 trillion prior to COP26. Minerva is proud to join this GFANZ commitment as a founding member of the Net Zero Financial Service Providers Alliance (NZFSPA). We know that the financial services sector will be at the forefront of the race to zero, de-risking ESG investments and addressing data gaps. Mark Carney emphasised the importance of data providers such as Minerva, reminding COP26 attendees that the “core of the financial system is looking for validation of what ‘net zero aligned’ means”.
Adding to the US$130 trillion in capital, the NZFSPA announced six new signatories committed to aligning all their relevant services and products to improve consistency in financial decision-making with achieving a net zero economy by 2050, at the latest. Alliance members will set Science-Based Targets for their own emissions and have committed to report on their progress, including publishing disclosures aligned with the recommendations of the Taskforce on Climate-Related Financial Disclosures.
Chancellor Rishi Sunak continued the good news, with an announcement by the British government to create the world’s “first-ever net zero-aligned financial centre”. This will be achieved through a series of initiatives outlined in the Chancellor’s keynote speech, including the mandatory requirement for asset managers to report their net-zero alignment on a yearly basis, starting in 2023. This announcement was accompanied by a policy document published shortly afterwards by the UK Treasury. published by the Minerva is ready to play a crucial role in helping UK asset managers achieve this goal, offering sustainable stewardship solutions for asset managers to keep up with the rapidly changing market.
On the side of public finance the British Minister for Climate Change, Greg Hands, announced a new global commitment to pivoting away from fossil fuels with 20 signatories and counting. In his opening speech at a session on putting public finance on the right side of history, Mr Hands stated “there is no future for fossil fuel financing”. Summarising the many innovative and impactful developments at COP 26, US Treasurer Janet Yellen marked COP26 as the first UN climate conference to see both “countries and businesses stepping up to put their money where their mouth is”.
Climate finance promises
These landmark announcements in the world of climate finance are just the tip of the iceberg, with further announcements throughout the week including:
- FCA confirms Disclosures and Labels Advisory Group to advise on SDR and sustainable investment labels
- FCA publishes ESG strategy
- IFRS Foundation announces International Sustainability Standards Board (ISSB)
- Climate Investment Funds’ Capital Markets Mechanism
Climate Stewardship – Have Your Say
Minerva is launching a stakeholder survey for our clients and the wider investment community about their individual climate stewardship preferences. The survey is supported by Minerva’s latest Briefing – Climate Stewardship – which looks at the implications of Paris-aligned sustainable stewardship and the voting choices that investors currently face. Your feedback will help us to ensure that our research and voting guidelines meet client and market needs as we work towards a Net Zero 2030. We look forward to hearing from you.Last Updated: 5 November 2021