COP26 announcement and the role of technology
COP26 has been a welcome stimulus for both the public and private sector to increase efforts to mobilise climate finance and support the achievement of net zero targets. techUK is hosting an online event on green finance on 8th December.
Key UK announcements at COP26
At COP26 the Chancellor announced he will set out the UK's plans to become ‘the world's first net zero aligned financial centre’ and welcomed ‘historic’ climate commitments from private companies covering $130 trillion of financial assets.
- Over $130 trillion – 40% of the world's financial assets – will now be aligned with the climate goals in the Paris Agreement, thanks to climate commitments from financial services firms
- New UK climate finance projects funded from the UK's international climate finance commitment will help developing countries to fund green growth and adapt to the changing climate
These commitments will help to create a huge pool of cash that could fund our net zero transition, including the move away from coal, the shift to electric cars, and the planting of more trees.
Under the proposals, there will be new requirements for UK financial institutions and listed companies to publish net zero transition plans that detail how they will adapt and decarbonise as the UK moves towards a net zero economy by 2050.
The Chancelor also hailed the progress made to “rewire the entire global financial system for net zero” under the UK's leadership of COP and revealed that over $130 trillion – around 40% of the world's financial assets – is now being aligned with the climate goals in the Paris Agreement, including limiting global warming to 1.5°C.
These commitments come from over 450 firms from all parts of the financial industry, based in 45 countries across six continents, and have been delivered through the Glasgow Financial Alliance for Net Zero (GFANZ), which was launched by the UK to harness the power of the financial sector in the transition to net zero.
The UK will seek to address barriers to finance faced by developing countries with a series of new green initiatives funded from its international climate finance (ICF) commitment, including £100 million to respond to recommendations from the UK co-chaired Taskforce on Access to Climate Finance to make it faster and easier for developing countries to access finance for their climate plans.
In total, the UK will spend £576 million on a package of initiatives to mobilise finance into emerging markets and developing economies, including £66 million to expand the UK's MOBILIST programme, which helps to develop new investment products which can be listed on public markets and attract different types of investors.
Technology to unlock green finance
Emerging technologies such as cloud computing, blockchain, and artificial intelligence (AI) will help address some of these key challenges, such as data access, data processing, data integrity, and data-based climate-smart decision making to help achieve climate goals.
The public sector has also used emerging technologies to create innovative climate financial instruments, such as blockchain-based green bonds, central bank digital currencies (CBDCs), and carbon pricing mechanisms.
Further public and private investment in technology will be critical to ensuring governments and industry stay on track to meet net zero targets. Adopting the right policy framework and developing the existing fintech and academic hubs across the country will also be instrumental to improve green finance solutions.
Hugo joined techUK in March 2019 as the Programme Manager for Financial Services and Payments.
Before joining techUK, he worked in policy and public relations for different bodies and agencies, including the economic and financial services team of the French Prime Minister’s EU affairs department, Edelman and CMS Strategic.
Hugo holds a master’s degree in Public Affairs from Paris Sorbonne University. In his spare time, he enjoys cooking and photography.