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Climate change is the defining issue of the century; an existential risk and a code red for humanity. A rapid decarbonisation of our economies with global emissions decreasing by 7.6% every year is required to keep the Paris Agreement’s 1.5 degree goal within reach.
To achieve this goal will be incredibly challenging. We need an all-of-society approach to get there, with both public and private finance mobilising capital at scale to finance the transition. Estimates of how much the net zero ambition will cost range from around $100 to $150 trillion USD, cumulative over the next 30 years.
Mobilising capital on this scale is one of the core objectives at this year’s COP 26, which aims to keep 1.5 degrees within reach by unleashing the trillions in private and public sector finance required to secure global net zero.
This is also the drive behind the industry-led, UN-convened Net-Zero Banking Alliance, the banking element of the Glasgow Financial Alliance for Net Zero, which is designed to raise standards, and drive ambition across the financial sector using the criteria of the UN’s Race to Zero.
Through the Net-Zero Banking Alliance, a rapid, pivotal mobilisation of the banking sector is already underway with 92 banks representing US$ 66 trillion – over 43% of banking assets worldwide – now standing together and firmly committed to a net zero future. This includes the top 10 largest banks by assets in Europe, the 10 largest in North America and 6 of the 10 largest in Latin America and the Caribbean. In Asia Pacific 3 of the 10 largest are committed, and 2 of the 10 largest from the Middle East & Africa, with member banks headquartered in 39 different countries.
Banks are a vital part of enabling the decarbonisation of the global economy. Through lending and investment decisions, banks can accompany and prompt their clients to accelerate the transition. The Alliance provides a global leadership community of banks that have committed to catalysing the decarbonisation of entire industries and sectors – from energy, agriculture and transport, to real estate and production of raw materials – in a transparent, credible and consistent way, in line with science.