Reality bites as finance firms row back on their climate pledges
In the run-up to last year’s United Nations climate conference in Glasgow, there was huge optimism that the financial sector was finally stepping up to its responsibilities on tackling climate change. The Glasgow Financial Alliance for Net Zero (GFANZ), set up by former Bank of England and Bank of Canada governor Mark Carney and encompassing net zero alliances of asset owners, asset managers, insurers and pension funds, promised to accelerate the transition to a green economy.
Related Knowledge Center: Climate economics
Climate change is now a driver of the world’s economy. The impact is profound:
- Catastrophic weather events — hurricanes, floods, droughts, high temperatures — are more frequent and more extreme. The cost can be measured in both the initial damage caused and the longer-term impact on the economy.
- Vulnerable communities are increasing climate-related investments, hardening infrastructure and taking other protective measures.
- Investment in carbon capture and storage technologies is increasingly rapidly.
- Governments are making investments and crafting regulations to reduce emissions of carbon dioxide and other greenhouse gases.
On top of all of this is the cost of uncertainty. As the Fourth National Climate Assessment, released in 2018 by the U.S. Global Change Research Program, says, “The assumption that current and future climate conditions will resemble the recent past is no longer valid.”