Posted on December, 14 2020

(14 December 2020) - COP26 President Alok Sharma and United Nations Special Envoy for Climate Action and Finance Mark Carney have issued an open letter to CEOs of all private financial institutions, urging them to join the Race To Zero campaign. They also promise renewed efforts to step up climate finance commitments ahead of COP26, scheduled to be held in Glasgow from 1-12 December 2021.

"It has become clear that countries will need the support of the finance sector in order to achieve their climate ambitions; public finance alone cannot achieve the scale or pace of change to put the world on the path to net zero. Ahead of COP26 we are urging financial institutions to make commitments that demonstrate the collective leadership needed for the transition to a net zero and climate-resilient future," they write in the letter.

Recognizing the complexity of the financial sector and the different business models involved, Carney who is also UK Prime Minister’s Finance Adviser for COP26, Nigel Topping (COP26 High Level Climate Action Champion) and the COP26 Presidency will soon launch a finance initiative as a collaboration with the Race to Zero. "This will ensure all financial institutions can join, and will support them with a framework for backing up these commitments with credible action."

Margaret Kuhlow, WWF Finance Practice Leader said: "Climate scientists have told us that to avoid the worst impacts of climate change we must keep global warming to 1.5˚C. The financial sector has a particularly vital role to play in driving systemic transformation. We need to see high ambition net-zero commitments from across the global financial sector that are science-based. We also need to see action - including increased investment in nature-based solutions that recognize the relationship between addressing climate change, protecting and restoring nature - and advocacy for decarbonization across the broader economy.”

While there has been good progress with many financial firms implementing the guidelines of the Taskforce for Climate-related Financial Disclosures (TCFD), and signs that institutions are beginning to align their financing activities and portfolios with the Paris Agreement, said Sharma and Carney, "we must continue this progress, at pace. The urgency of the climate crisis is such that all actors, from countries to financial institutions, must adopt climate targets that are not only ambitious, but also aligned with climate science and grounded in the highest standards of transparency and governance."

Achieving net zero requires a global economy transition. "We all need to make ambitious and public commitments and show that the transition can be financed. This is a good business decision, as well as a responsible one," say Sharma and Carney.

Notes to Editors

• The Race to Zero campaign is backed by a coalition of UN institutions, leading climate NGOs - such as the WWF and World Resources Institute - and global business groups who are all calling on businesses to join ahead of COP26.
• Sharma and Carney urge finance institutions to sign up to the Race To Zero, setting ambitious targets and action plans to reduce emissions and build resilience. They can do this by signing up to industry-specific net zero initiatives, including:
  • The Business Ambition for 1.5 pledge, which includes the new Science-Based Targets initiative’s methodology for the finance sector
  • The Net-Zero Asset Owners Alliance; and
  • The new Net-Zero Asset Managers Initiative (launched on 11 December).
  • The COP26 Finance Coalition Coordination Mechanism (FCCM), a new initiative of key actors and the COP26 Presidency. It aims to ensure that finance coalitions and NGOs are aligning with COP26 objectives and that the entire global community engaged in mobilizing financial institutions for climate action is better coordinated and all “rowing in the same direction” for COP26.
• They note the appointment of Andrew Griffith, UK MP, as the UK Net Zero Business Champion to support and champion UK businesses making the transition to a low-carbon economy.

For further information contact:

• Justin Woolford jwoolford@wwfint.org (WWF International Finance Practice communications manager)
• Mandy Jean Woods mwoods@wwfint.org (WWF International Climate & Energy communications manager)