Humanity is facing a code red on three fronts.
The climate crisis is a huge immediate concern. Impacts are growing and we are still heading for a disastrous global temperature rise of 2.7°C this century.
The nature crisis is a huge immediate concern. The way we build our cities and infrastructure, run our food, energy and mobility systems is destroying the natural foundations of our prosperity and health.
The pollution crisis is a huge immediate concern. Our dependence on fossil fuels, poorly managed chemicals and pesticides is poisoning the air, land and water.
These three crises intertwine into a single planetary crisis. A crisis we must tackle. To do this – by reforming pretty much every system and replacing every harmful technology – we need to invest. You know the numbers. To meet the Sustainable Development Goals, we need trillions, not billions, of extra investment. And let’s be clear: the bulk of those investments will need to be made, and financed, by the private sector.
Friends, many private sector actors are making commitments.
Under the Race to Zero, over 4,000 businesses have committed to net-zero by 2050.
Let me now focus - within the wider private sector - more specifically on the finance sector, which we, as UNEP, help to convene and mobilise towards net-zero. And, which we need to have fully onboard to be able to transition the real economy.
The Glasgow Financial Alliance for Net Zero now includes over 400 financial firms responsible for assets of roughly USD 130 trillion, all committed to transitioning their financial holdings and portfolios to net-zero by 2050.
This is truly ground-breaking. But let’s remind ourselves that these commitments now must become action.
And when it comes to the finance sector, let’s remind ourselves of four of the key and ground-breaking features of these commitments. They are:
One, comprehensive.
Aligning financial portfolios with the Paris Agreement goals requires that financial institutions view their portfolios and holdings in a holistic manner – managing their full carbon-footprint, across sector, geographic and asset class exposures.
Two, science-based.
The scientists know what they are doing. So, aligning financial portfolios needs to happen based on the scenarios laid out by the Intergovernmental Panel on Climate Change, among others.
Three, measurable and transparent.
Financial institutions have made commitments. They are going to have to prove that they are meeting them to a world that is increasingly skeptical about greenwashing. This means full public reporting.
Four, immediate.
Intermediary targets are for 2030 the latest. Eight years. That’s how long they have to reach their first key milestone. So, they need to take immediate concrete action now. If financial institutions are serious about net-zero portfolios, they can’t keep financing the expansion of infrastructure, technologies and business models that are incompatible with their goals.
Friends,
This task won’t be easy, neither for the finance sector nor for the industries in the real economy that it finances. But it is necessary, for human health, prosperity and peace. All of which the private sector needs for a profitable future. You have promised to do the work, and I sincerely thank and congratulate you. The world will be watching to see that you keep your word, and in doing so we will support you where we can.
