To achieve our climate goals, every company, every financial firm, every bank, insurer and investor will need to change. Countries need to manage the increasing impacts of climate change on their citizens’ lives and they need the funding to do it.
The scale and speed of the changes we need to make will require all forms of finance:
1. Public finance for the development of infrastructure we need to transition to a greener and more climateresilient economy.
2. Private finance to fund technology and innovation, and to help turn the billions of public money into trillions of total climate investment.
Support of developing countries
Developing countries in particular need support. Developed countries must deliver on their promise to mobilise $100 billion every year in climate finance to support developing countries. This must include building new markets for adaptation and mitigation and improving the quantity, quality and access to finance to support communities around the world to take action on the changing climate.
The OECD estimates that $79.6 billion of climate finance was mobilised in 2019. The UK is doubling our International Climate Finance commitment to help developing nations with £11.6 billion over the next five years up to 2025/2026. We want as many countries as possible to follow our lead and increase their commitments through to 2025.
Ahead of COP26, COP26 President-Designate Alok Sharma asked Jonathan Wilkinson, Canada’s Minister of Environment and Climate Change and Jochen Flasbarth, Germany´s State Secretary at the Ministry for Environment, Nature Conservation and Nuclear Safety, to work together to produce a Delivery Plan on the $100 billion commitment, to demonstrate how and when developed countries will deliver on their promise. This was published on 25 October 2021, alongside a technical report from the OECD. The Presidency has also published a list of developed country commitments.
Climate Finance Delivery Plan: Meeting the US$100 Billion Goal.
OECD Technical Note: Forward-looking Scenarios of Climate Finance Provided and Mobilised by Developed Countries in 2021-2025.
COP26 Presidency Compilation of 2021-2025 Climate Finance Commitments (as at November 2021).
Unpleasing the trillions in private finance
Ahead of COP26, we must work to unleash the trillions in private finance that are needed to power us towards net zero by the middle of the century. To do this, every financial decision needs to take climate into account:
1. This includes all private investment decisions, but also all spending decisions that countries and international financial institutions are making as they roll out stimulus packages to rebuild economies from the pandemic.
2. Companies need to be transparent about the risks and opportunities that climate change, and the shift to a net zero economy pose to their business.
3. Central banks and regulators need to make sure that our financial systems can withstand the impacts of climate change and support the transition to net zero.
4. Banks, insurers, investors and other financial firms need to commit to ensuring their investments and lending is aligned with net zero.
COP26 Finance Approach
Read the COP26 priorities for public climate finance Read the priorities for private finance for COP26
Taskforce on Access to Climate Finance
At the Climate and Development Ministerial, convened by the UK COP26 Presidency on 31 March 2021, participants recognised the urgent need to streamline access to climate finance, with greater individual and collective action required both before and following COP26.
The Taskforce on Access to Climate Finance was announced in response to calls for coherent and effective support for developing countries’ efforts to decarbonise their economies, adapt to climate change and establish green growth pathways.
As the initial co-chairs, the UK and Fiji have committed to working with partners to launch the Taskforce, including Bhutan, Belize, Malawi, Rwanda, Senegal, Germany, Sweden, USA, the GCF and the World Bank as members of the Steering Committee.