Investors are betting big on the fight against the climate, but the motives are questioned

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GLASGOW, Scotland – Governments and large investors on Wednesday announced new measures to pour billions of dollars into curb global warming, reflecting the growing support of the financial world in efforts to tackle climate change as a necessity and a business opportunity.

But some social justice activists have called for a careful examination of investor motivations, warning that the same financial institutions that have profited from funding fossil fuel companies are now being touted as green champions.

There is a growing consensus that the private sector must be involved if the world is to avoid catastrophic global warming. Speaking at the UN climate summit in the Scottish city of Glasgow, UK Treasury Chief Rishi Sunak said that while countries like the UK provide new funds to help poor countries do in the face of climate change, “public investments alone are not enough”.

He on Wednesday welcomed the pledge of a group of more than 450 major financial institutions to align their investments with the 2015 Paris climate agreement – which calls for reducing carbon dioxide emissions and other efforts. to limit global warming to 1.5 degrees Celsius (2.7 degrees Fahrenheit) above before. industrial levels.

“This is a historic wall of capital for the net zero transition in the world,” Sunak said at the conference. known as COP26.

The Glasgow Financial Alliance for Net Zero – launched this year by former Bank of England chief Mark Carney – has pledged to follow scientific guidelines to reduce carbon emissions to ‘net zero’ by 2050.

This goal, which means limit greenhouse gas emissions to the amount that can be re-absorbed by natural or man-made means – is increasingly adopted by businesses and governments around the world.

Scientists say fossil fuel use needs to drop dramatically over the next decade to achieve this goal, which means investors would likely have to cut funds for oil, gas and coal producers significantly.

“It is huge that financial institutions with $ 130 trillion in assets are now leading the charge towards a net zero future,” said Helen Mountford, senior climate expert at the World Resources Institute think tank.

She said the massive mobilization of public and private funding will be essential to tackle global warming.

To that end, Sunak said UK financial institutions and listed companies will be required to publish plans detailing how green their investments and their own businesses are – to ensure that they actually contribute to the reduction. of global warming.

As the headquarters of the City of London, one of the world’s major financial centers, the UK “has a responsibility to lead the way” in funding efforts to fight global warming, Sunak said, becoming potentially “the world’s first net-zero aligned financial center.”

But James Thornton, founder of the environmental law charity ClientEarth, questioned the effectiveness of the UK effort.

“The UK market is still addicted to fossil fuels,” he said, calling for a task force to ensure that companies do not “launder” their operations – that is, by using High-profile announcements of so-called green initiatives to mask other “dirty activities. Experts also warn that there are different ways to calculate net zero – and deciding on a standard definition is one of the big challenges facing the government. to come up.

Some activists were suspicious of the motives of large investors in general.

“Many of the financial institutions gathered today have wreaked havoc with the climate and ecological crisis, and we should be wary of any attempt to pass them off as heroes,” said Dorothy Guerrero, head of policy for the United Nations. non-governmental group Global Justice Now. “Governments need to regulate the process and lead the transition, rather than just leaving it to business. “

Speaking on the same panel as Sunak, US Treasury Secretary Janet Yellen described tackling climate change as both a huge financial challenge, with a price tag of $ 100,000 billion, and “the most great economic opportunity of our time “.

“Many renewables are now cheaper than alternative carbon-based fuels and have lower long-term operating costs,” she said. “In many cases, it just pays to go green. “

US President Joe Biden issued an executive order earlier this year aimed at require companies to disclose climate-related financial risks.

Biden’s climate envoy John Kerry said the announcement from large investors reflected serious pressure from participants at the Glasgow conference to put in place concrete measures to tackle climate change.

“This (conference) has more energy, more focus, an intensity that I haven’t felt in any of the other” UN climate talks, he said.

But enthusiasm for the meeting was dampened among poorer countries, who angrily noted that Britain and other wealthy countries had failed to live up to their previous pledge to provide $ 100 billion a year. to finance climate-related projects in the developing world by 2020.

This target should now be reached in 2023.

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Kirka reported from London.

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