COP26: Financial institutions pledge $130 billion to decarbonization

Glasgow, UK, Nov 3 (EFE).- Major private financial institutions from 45 countries on Wednesday pledged $130 billion to help decarbonize the world by mid-century during the COP26 climate conference in Glasgow.

The commitment by 450 institutions, including HSBC, Banco Santander and J.P Morgan among others, is “more than is needed for the net-zero transition globally,” said Mark Carney, the United Nations Special Envoy on Climate Action and Finance.

These sums, however, will not replace the funds that large economies have promised to developing countries to help them tackle global warming, according to the COP26 presidency.

“The money is here,” Carney said. “But that money needs net-zero aligned projects and there’s a way to turn this into a very, very powerful virtuous circle and that’s the challenge.”

The financial pledge will have to be accompanied by mechanisms to measure and verify that the funds actually meet their objective.

“Investors need to have as much clarity and confidence in the climate impact of their investments as they do in the traditional financial metrics of profit and loss,” British economic minister Rishi Sunak said in a speech.

Meanwhile, the United Kingdom, one of the world’s main financial centers, announced on Wednesday that it will force listed companies and financial institutions operating in their territory to present decarburization plans.

“I agree we all must do more, and the United States is stepping up,” the United States Treasury Secretary Janet Yellen, adding that Washington is “quadrupling” climate financial support to developing countries.

The US will create new “innovative” mechanisms to attract $500 billion a year in climate finance, Yellen added.

This huge amount of private capital does not close the gap of $20 billion that rich states owe developing countries, according to commitments made in the 2015 Paris Agreement.