1. The launch of the Glasgow Financial Alliance for Net Zero (GFANZ) was described as a “watershed moment and gamechanger” by NGFS (Network of Central Banks and Supervisors for Greening the Financial System) Chair Frank Elderson. GFANZ’s 450 members represent USD130trn assets. 40% global assets are now committed to the transition. GFANZ’s statements affirm that investor appetite is sky-high and the money is available for net zero.
2. The NGFS Glasgow Declaration was all about central banks’ commitments to integrate climate risk into their supervision and monetary action, with 2/3 of their 100 members also publishing individual pledges. Frank Elderson described the NGFS as no longer just a coalition of the willing but “a coalition of the committed”.
3. The draft report of the EU-China common ground taxonomy, on which Climate Bonds were expert consultants, has been published. This provides clarity on commonalities between the two taxonomies and will enable transnational green capital flows. It will serve as a starting point for taxonomy development in other countries.
4. The Climate Investment Fund announced a new “Capital Markets Mechanism” that will use the backing of donor countries to borrow funds to invest in renewable energy projects in developing countries, allowing those countries to get financing at incredibly low rates equivalent to rich country sovereign green bond issuance. Perfect.
5. A brilliant South Africa deal delivers USD8.5bn from France, Germany, UK, US and EU for a Just Energy Transition Partnership to accelerate coal phaseouts. It’s a mix of grants, concessional loans, risk-sharing and investment. This is a blueprint for funding rapid decarbonisation in other emerging markets.
6. The US President’s Emergency Plan for Adaptation and Resilience (PREPARE) provides USD3bn a year in adaptation finance for developing countries. The initiative will mobilise public and private capital, building capacity in developing companies to respond to what are now the inevitable social and economic impacts of climate change. Absolutely needed.
7. The Bank of England published its approach to greening its corporate bond purchase scheme (CBPS). This is meant to remedy the carbon bias of ‘market neutrality’, a measure recommended in our 2019 ‘Tilting the Playing Field’ report. The new policy excludes bonds from firms that don’t disclose their carbon emissions in line with UK requirements, and entirely excludes thermal coal bonds. Big. The net result will be a 25% reduction in the CBPS’s carbon intensity by 2025.
8. The newly-created International Sustainability Standards Board (ISSB) is set to become a comprehensive global baseline for sustainability disclosure standards. The aim is to facilitate greater global consistency in non-financial reporting and pave the way for mandatory reporting.
9. Over 20 countries and MDBs, covering 1/3 GDP, have committed to end overseas fossil fuel finance by the end of 2022. This should involve a USD8bn shift in finance from fossil fuels. It looks like they are now listening to the scientists.
10. The UK announced plans for London to become a Net Zero-aligned Financial Centre.
11. The Powering Past Coal Alliance’s membership has swollen to 165, with finance sector members accounting for USD17trn in assets. With 23 countries committing to coal phaseout, COP26 is sounding the death knell for coal. Investors need to now address the dangers of natural gas investment, as laid out in Climate Analytics’ new report ‘Why gas is the new coal’.
12. Finally, and in some ways neatest of all, Ithaca, N.Y., voted to decarbonise all its buildings — residential and municipal — and laid out a plan to do so by 2030. With buildings and construction accounting for 40% of global emissions, this is the level of ambition needed around the world. Go Ithaca!