The sum of global capital committed to achieving net-zero greenhouse gas emissions has surged to over $130 trillion, up from only $5 trillion when the UK and Italy assumed the COP26 Presidency, an international alliance of financiers said Nov. 3.
The UK and Italy took up the COP26 Presidency in 2019, taking over from Chile and Spain.
The 25-fold increase in capital is more than enough to transform the global economy to become net-zero by 2050, according to the Glasgow Financial Alliance for Net Zero – a global coalition of leading financial institutions.
The expansion in clean capital represents a boost for a swathe of technologies and initiatives, from the global voluntary carbon market to renewable energy technologies, clean transportation and low-carbon industries.
"These commitments, from over 450 firms across 45 countries, can deliver the estimated $100 trillion of finance needed for net-zero over the next three decades," the GFANZ said in a statement.
The new alignment on finance is nothing short of a re-wiring of the global financial system to deliver emissions reductions demanded by science to avoid crossing dangerous temperature thresholds.
"To support the deployment of this capital, the global financial system is being transformed through 24 major initiatives for COP26 that have been delivered for the summit," the group said.
"This work has significantly strengthened the information, the tools and the markets needed for the financial system to support the transformation of the global economy for net-zero," said the GFANZ.
The agreement means firms across the entire financial spectrum – banks, insurers, pension funds, asset managers, export credit agencies, stock exchanges, credit ratings agencies, index providers and audit firms – have committed to high ambition, science-based targets, including achieving net-zero emissions by 2050 at the latest.
It also means they have committed to delivering their fair share of the 50% emissions reductions by 2030 and renewing their targets every five years.
"All firms will report their progress and financed emissions annually," the GFANZ said.
The group issued a report during the UN Climate Change Conference in Glasgow, running Nov. 1-12, which involves two weeks of negotiations on issues ranging from emissions reductions, climate adaptation, finance, sustainable development, technology transfer and global carbon markets.
The report outlined an ambitious work underway, led by GFANZ CEOs, to address some of the biggest climate finance challenges.
Those include defining net-zero pathways for carbon-intensive sectors, aligning on what constitutes a robust transition plan for corporates and financial institutions, and a sector-wide plan to mobilize capital needed for decarbonization in emerging markets.
"Collectively, this work will accelerate the implementation of net-zero commitments and help rapidly scale capital flows to support the net-zero transition," the group said.