Closer coordination planned to support COP26 goals.
Major finance sector coalitions and non-governmental organisations have pledged provide coordinated support to the COP26 Presidency and the Race to Zero under a new umbrella grouping.
The COP26 Finance Coalition Coordination Mechanism (FCCM) was announced ahead of the 2020 Climate Ambition Summit, jointly organised by the United Nations and the UK and French governments to mark the fifth anniversary of the Paris Climate Agreement.
The FCCM is aimed at ensuring finance sector-focused initiatives are aligned with the objectives of next year’s COP26 climate conference in order to better coordinate efforts at mobilising financial institutions and service providers in support of climate action.
Participating entities include the Principles for Responsible Investment, United Nations Environment Program Finance Initiative, WWF International, and the six founding partners of The Investor Agenda.
The FCCM consists of cross-organisational teams focused on specific jurisdictions. The work of member coalitions and NGOs will be supported by country teams including national organisations working with financial institutions locally on climate change initiatives. Each FCCM country team has developed and is iterating a strategy for finance sector mobilisation in their jurisdiction.
“By COP26 we need to see new climate commitments from financial institutions that amount to the most significant ever. These need to demonstrate the collective intent for massive material change in future financial flows, as well as the widespread adoption of financial practices that actively support the transition to net zero by 2050 or earlier. The COP26 Finance Coalition Coordination Mechanism is critical coordination infrastructure to make sure this ambition can be realised at Glasgow,” said Ben Caldecott, COP26 Strategy Advisor for Finance at the UK Government’s Cabinet Office.
At the Climate Ambition Summit 2020, held virtually on December 12, participating countries issued new commitments related to the three pillars of the Paris Agreement i.e. mitigation, adaptation and finance commitments.
Among the new commitments, President Xi Jinping said China would cut the carbon intensity of its GDP by over 65% from 2005 levels by 2030 and Pakistan Prime Minister Imran Khan said his country would stop building coal-fuelled power plants. The UK said it will stop financing fossil fuel projects abroad, while co-host France said all CAC40 companies would have to list climate risks in their financial disclosures from 2021. UN Secretary-General Antonio Guterres warned that the world is still currently on course for 3C of warming.
As part of the Climate Ambition Summit 2020, CEOs of financial institutions were urged to sign up to the Race to Zero in an open letter from Alok Sharma, COP26 President and UK Business Secretary, and Mark Carney, the UK Prime Minister’s Finance Adviser for COP26 and UN Special Envoy for Climate Action and Finance.
The Race to Zero campaign is UN Climate Change initiative aimed at encouraging organisations to set targets for resilience and emissions reduction, including businesses, cities, regions, and investors.
Financial institutions can participate by signing up to industry-specific net zero initiatives such as the Science-Based Targets Initiative, the UN’s Net-Zero Asset Owners Alliance or the recently announced Net-Zero Asset Managers Initiative.
The open letter said a finance sector-specific initiative would soon be jointly launched as a collaboration with Race to Zero by the COP26 Presidency, Carney and Nigel Topping, the UK’s High Level Climate Action Champion for COP26.