COP26: Finance Day

Yesterday the World Leaders' Summit drew to a close, concluding two days of high-level statements from global heads of state, international organisations and business leaders on the urgent action required to achieve the goals of the Paris Agreement. Yesterday's highlights included:

·         More than 100 countries have pledged to end and reverse deforestation by 2030, while delivering sustainable development and promoting an inclusive rural transformation, in the first major deal of COP26. The announcement was bolstered by CEOs from 30 financial institutions committing to eliminate investment in activities contributing to deforestation.

·         The White House has announced regulatory measures to limit global methane emissions by 30% from 2020 levels by the end of the decade, as part of a multinational alliance attempting to curtail methane emissions largely targeting the oil and gas industry. The US and EU issued a joint press release for the Global Methane Pledge, hailed by US President Biden as "a game-changing commitment".

·         The UK and India have announced the launch of a joint fund to help small island states be better prepared for natural disasters related to climate change, in an acknowledgement that such states are uniquely vulnerable to rising sea levels.

·         World leaders representing two-thirds of the global economy have announced a plan to make green technologies cheaper than alternatives, coordinating the global introduction of such technologies to drive down their cost. The "Glasgow Breakthrough" areas include the Green Grids Initiative championed by the UK and India, among others, tasked with the development of international supergrids on all continents and to connect sunny deserts and windy coastlines to urban areas.

·         South Africa hopes to end its reliance on the coal industry after a deal was announced at COP26, under which the country will receive $8.5bn from wealthier nations to accelerate the transition to cleaner energy. Declared by South African President Cyril Ramaphosa as a "watershed moment", the nation is currently the twelfth biggest carbon dioxide emitter in the world.

With the majority of world leaders having now left Glasgow, COP26 now moves from high-level ambition to detail. Today is Finance Day, where delegates will discuss the accelerated mobilisation of public and private finance for climate action, and notably, how the $100bn a year climate aid target to support developing countries to cut their emissions will be met. On the agenda today:

·         UK Chancellor of the Exchequer, Rishi Sunak, will open Finance Day, tracking progress since the Paris Agreement and outlining his blueprint for making the UK the first net-zero financial hub. This will include a requirement, by 2023, for larger firms to set out their own detailed public plans for how their businesses will move to a low-carbon future.

·         Mark Carney, UN Special Envoy on Climate Action and Finance and the COP Finance Advisor, will lead an event showcasing the steps taken by the financial sector to align financial flows with Paris goals. Carney leads the Glasgow Financial Alliance for Net Zero, which has announced that more than £95trn of private capital "is now committed to transforming the economy for net zero".

·         A mobilisation event titled "Delivering Finance for Emerging and Developing Markets" will highlight the public and private interventions, including the increased efforts of Multilateral Development Banks, to unlock private climate finance, in pursuit of delivering the $100bn per year climate aid target, and beyond.