Finance Breaking news Davos 2021: Carney on net-zero – 'If you're not in, you're out' last financial news
Breaking-Finance.Com - Finextra is at Davos this year, covering global insights into the impact fintech has on wider issues such as responding to Covid-19, restoring economic growth and advancing a new social contract.
Breaking-Finance.Com - Finextra is at Davos this year, covering global insights into the impact fintech has on wider issues such as responding to Covid-19, restoring economic growth and advancing a new social contract. Speaking in frank terms to the financial community from the ‘Financing the “Net-Zero” Transition’ panel discussion at Davos, special envoy for climate action and finance to the UN, Mark Carney, put the private financial sector on notice to act on climate change by participating in this November’s COP26 summit in Glasgow. The former Bank of England governor says, “if you are part of the private financial sector and you are not part of the solution […] you will have made the conscious decision not to be aligned to net zero. It’s a net-zero COP, that’s the objective and the expectation […] if you’re not in, you’re out because you chose to be out.” Softening the warning, Carney adds that there is plenty of goodwill and support available from the COP26, which to date boasts 127 countries (and counting) with commitments to net-zero. Carney’s comments followed discussion that heavily focused on the need for “blended finance” which would see the public and private sector work together with greater effect to achieve climate goals. Stephanie von Friedeburg, managing director and executive vice-president ad interim, COO, International Finance Corporation (IFC), notes that when looking at emerging markets in particular, the IFC sees a lack of bankable projects. “We need to find a way to de-risk these projects and attract sponsors who can build projects that matter in relation to being net-zero.” Carney furthers that while the global net-zero alignment is cascading down through the private sector, there isn’t the same level of orientation across the entire spectrum including multilateral development banks and development finance institutions.
“That’s part of what we need to fill in and crucially, if we can, this will help unlock very large, blended finance flows to emerging and developing economies. That’s part of the necessary architecture.”
Circling back to the role of political will in the ability to promote and achieve climate objectives, von Friedeburg agrees with the panel in noting that the problem must be solved by the private sector.
However, she qualifies that this can’t be done in isolation, and “what we really need governments to do is create the right policy and regulatory environment, and be willing to create public private partnerships that will attract the private investment to actually create the right projects and finance those projects.”
Also speaking on the panel, former US Vice President Al Gore provided an injection of optimism to the discussion, mentioning the significance of commitment being demonstrated within the first week of the Biden Harris administration in addition to major new commitments by the EU, China, Japan and South Korea.
“We are in an almost unprecedented global transition. Many call it the sustainability revolution empowered by new digital technologies with much greater precision, than a couple of decades ago.”
Quoting Nelson Mandela, Gore adds that it is always impossible until it’s done, and “what we’re seeing now is a gathering of the forces, both private and public, fuelled by this global conscience to secure our future, and the financing is going to follow those commitments.”
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