​​​​​​​Press release issued on behalf of the UK COP26 Presidency and the COP25 and COP26 High-Level Climate Champions

• Finance Ministers gather in Glasgow to discuss mobilising funding for rapid, large-scale climate action
• Discussions follow new pledges of public climate funding from developed nations at COP26 World Leaders Summit, including significant pledges for climate adaptation
• Finance commitments for climate mitigation led by new announcement at Leaders Summit of $8.5 billion Just Energy Transition to help South Africa move to clean energy
• UK Presidency welcomes alignment of $130 trillion of private finance to science-based net zero targets and near term milestones, through the Glasgow Financial Alliance for Net Zero.

Finance Ministers, International Finance Institutions and the financial sector are meeting at COP26 today to get global finance flowing for climate action.

Mobilising finance is critical if we are to deliver the urgent action we need to limit global temperature rises to 1.5C. Trillions of dollars of additional investment a year are needed to secure a low-carbon future and support countries already living with the devastating impacts of climate change.

COP26 President Alok Sharma said: "Today, there is more public and private finance for climate action than ever before.

But to meet the commitments made in the Paris Agreement and keep 1.5 alive, we need developed countries to deliver on public finance, and to unleash the trillions required in private investment to create a net zero future and protect lives and livelihoods from the devastating effects of climate change.

That is why we have made finance such a key focus of COP26, why these new commitments from nations and the private finance sector are so welcome, and why we continue to push for countries to do more to meet their finance obligations. Countries are telling us what they need, now global finance needs to respond.”

Meeting the S100 billion commitment and financing adaptation

Countries made new commitments to increase finance to support developing countries to deal with the impacts of climate change, including a commitment from Norway to triple its adaptation finance, commitments from Japan and Australia to double their adaptation finance, and commitments from Switzerland, the US and Canada for the Adaptation Fund.

This included the largest US adaptation finance commitment to date, to reduce climate impacts on those most vulnerable to climate change worldwide. While Canada committed to allocate 40% of its climate finance to adaptation.

New commitments for climate financing also came from the United Kingdom, Spain, Japan, Australia, Norway, Ireland and Luxembourg, that build on the plan set out ahead of COP26 to deliver the $100 billion per year to developing countries.

To combat the difficulties many countries face with the bureaucracy of securing climate investment, £100 million in new funding from the United Kingdom was announced today to support the approach of the Taskforce on Access to Climate Finance, co-chaired by the UK and Fiji.

The taskforce launched a partnership with five ‘pioneer countries’ – Bangladesh, Fiji, Jamaica, Rwanda and Uganda – to support them and their local communities to get the finance they need for their climate plans.

Further commitments are expected over the coming days, including on adaptation. COP will also see the launch of discussions on a new global finance goal to replace the $100 billion goal from 2025.

Public finance for a net zero future

Demonstrating the direct benefits of what public climate financing can achieve: leaders from South Africa, the United Kingdom, the United States, France, Germany and the European Union yesterday announced a ground-breaking partnership to support South Africa with an accelerated just energy transition.

As a first step, the international partnership announced that $8.5 billion can be made available over the next 3-5 years to support South Africa – the world’s most carbon-intensive electricity producer – to achieve the most ambitious emissions reduction target within its upgraded and ambitious Nationally Determined Contribution.

Mobilizing private finance

Finance Ministers also discussed that the billions of dollars in public finance must be used to leverage the trillions of dollars in private finance needed for a climate resilient, net zero future, and how to support developing countries to access that finance.

The United States, the European Commission and the UK also committed to work in partnership with countries to support a green and resilient recovery from COVID-19 and boost investment for clean, green infrastructure in developing countries.

The UK also committed £576 million at COP for a package of initiatives to mobilise finance into emerging markets and developing economies, including £66 million to expand the UK’s MOBILIST programme, which helps to develop new investment products which can be listed on public markets and attract different types of investors.

Initiatives announced by the World Bank Group and Asian Development Bank will share risk with developing countries and aim to raise up to $8.5 billion in new finance in support of climate action and sustainable development. There was also the launch of an innovative new financing mechanism – the Climate Investment Funds’ Capital Markets Mechanism (CCMM) that will boost investment into clean energy like solar and wind power in developing countries.

Aligning private finance for net zero

Private financial institutions also took a major step to ensure that existing and future investments are aligned to the global goal of net zero.

Thirty five countries agreed to mandatory actions to ensure that investors have access to reliable information about climate risk to guide their investments into greener areas. And to ensure common standards, 36 countries welcomed the announcement of a new international body, the International Sustainability Standards Board (ISSB).

Over $130 trillion of private finance is now committed to science-based net zero targets and near term milestones, through the Glasgow Financial Alliance for Net Zero, led by Mark Carney.

GFANZ members are required to set robust, science-based near-term targets within 12-18 months of joining, and more than 90 of the founding institutions have already done so. A key focus of GFANZ is supporting developing countries and emerging markets.

The UK Chancellor also announced plans to make the UK’s financial centre aligned to net-zero. Under the proposals, there will be new requirements for UK financial institutions and listed companies to publish net zero transition plans that detail how they will adapt and decarbonise as the UK moves towards to a net zero economy by 2050.

Contact

Please email cop26media@cabinetoffice.gov.uk for any COP26 Press/Media enquiries.

For anything urgent please call the COP26 Press Office on 0207 276 0269.

Official images from COP26 are available to download at: https://www.flickr.com/photos/186938113@N07

Notes to Editors

S100 billion climate finance goal

The Climate Finance Delivery Plan was published by the COP26 Presidency last week. Led by German State Secretary Flasbarth and Canada’s Minister Wilkinson, at the request of the COP President, the plan shows the trajectory for developed countries to deliver on the agreed goal of mobilizing $100 billion per year in climate finance to support developing countries.

The COP Presidency is tracking post 2020 climate finance commitments by developed countries on the COP26 website.

Taskforce on Access to Climate Finance

The UK announced £100 million to respond to recommendations from the Taskforce on Access to Climate Finance, co-chaired by the UK and Fiji, to provide capital grants to the most climate vulnerable countries to help them deliver ambitious climate plans. Access to finance is directly linked with countries’ emissions reduction and adaptation plans which creates incentives for greater climate ambition in these plans.

Glasgow Financial Alliance for Net Zero

• The Glasgow Financial Alliance for Net Zero (GFANZ) is a global coalition of leading financial institutions in the UN’s Race to Zero that is committed to accelerating and mainstreaming the decarbonisation of the world economy and reaching net-zero emissions by 2050.
• It provides a practitioner-led forum for financial firms to collaborate on substantive, crosscutting issues that will accelerate the alignment of financing activities with net zero and support efforts by all companies, organisations, and countries to achieve the goals of the 2015 Paris Agreement. To ensure credibility and consistency, access to GFANZ is grounded in the UN’s Race to Zero campaign, and entry requirements are tailored to the activities of the diverse firms represented. Further details can be found on www.gfanzero.com
• Today, through the Glasgow Financial Alliance for Net Zero (GFANZ) over $130 trillion of private capital is committed to transforming the economy for net zero, including commitment, from over 450 firms across 45 countries.
• Now firms across the entire financial spectrum – banks, insurers, pension funds, asset managers, export credit agencies, stock exchanges, credit rating agencies, index providers and audit firms – have committed to high ambition, science-based targets, including achieving net zero emissions by 2050 at the latest, delivering their fair share of 50% emission reductions this decade, and reviewing their targets towards this every five years. All firms will report their progress and financed emissions annually.

Global climate reporting standards

• The IFRS Foundation announced the establishment of an International Sustainability Standards Board (ISSB) to develop comprehensive global baseline sustainability reporting standards under robust governance and public oversight. The IFRS Foundation confirmed agreements with existing sustainability reporting bodies to create the global standard-setter for sustainability disclosures for the capital markets.
• The Foundation also published two prototype standards to enable the ISSB to rapidly build on existing frameworks – including the Task Force on Climate-Related Financial Disclosures (TCFD) – when developing its standards. Standards will be subject to full public consultation and can be considered for adoption by jurisdictions on a voluntary basis. Jurisdictions will have their own legal frameworks for adopting, applying or otherwise making use of international standards.
• Finance Ministers and Central Bank Governors from 36 jurisdictions (list footnoted) from across 6 continents (see below) publicly welcomed the announcement of the establishment of the ISSB and its work programme to develop a set of internationally consistent, high-quality, and reliable baseline standards for disclosure of sustainability-related information on enterprise value creation.
• Jurisdictions are: Australia, Brazil, Canada, Chile, China, Egypt, Ethiopia, European Commission, Fiji, France, Germany, Greece, Guatemala, India, Indonesia, Italy, Jamaica, Japan, Kenya, Korea, Luxembourg, Morocco. Netherlands, New Zealand, Nigeria, Philippines, Saudi Arabia, Seychelles, Singapore, Spain, Switzerland, Tonga, Turkey, UK, Uruguay, USA

Mobilising green investments into developing countries

New expertise and funding is being announced to support developing countries to mobilise finance for low carbon, resilient development. Including: 

• The Climate Investment Funds (CIF) Capital Market Mechanism (CCMM) initiative will raise finance for projects in clean energy and sustainable infrastructure in developing and emerging economies. Bonds are planned to be issued in 2022 in the City of London and could mobilize up to $700 million annually, with the potential to leverage a further $70 billion from both the private and public sector
• The International Finance Corporation (IFC), with the Hong Kong Monetary Authority (HKMA), Allianz, through Allianz Global Investors, today launched a new global platform, MCPP One Planet, for Paris-Aligned climate smart investments that will provide up to $3 billion to private enterprises in developing economies.
• The Asian Development Bank (ADB) launched the Energy Transition Mechanism (ETM) to accelerate the retiring of coal power and the move to clean energy, one of the key goals for COP26. As part of the pilot phase in Indonesia, the Philippines, and Viet Nam, the ETM is expected to raise $2.5 to $3.5 billion to retire 2-3 coal-fired power plants per country.
• The International Finance Corporation (IFC), together with Amundi, announced a new $2 billion fund that will help to directly mobilize private investment into sustainable and green bonds in emerging markets. It will channel capital from institutional investors into anchor investments involving sustainable bond issuances from developing countries. It will provide a new model for other asset managers and institutional investors to replicate – giving a major boost to affordable green finance.

UK Finance

• The UK announced a total package of £576 million to mobilise finance into emerging markets and developing economies to fund their green transition. This includes an additional £66 million for MOBILIST, the UK’s flagship programme that supports the development of listed investment products and provides developing countries with improved access to international capital markets, and projects announced on the opening days of COP26: £110 million to the ASEAN Green Catalytic Finance Facility to support investment in sustainable infrastructure across ASEAN; £200 million for a new “Climate Innovation Facility” delivered under the UK’s development finance institution CDC to boost investment into the most pioneering climate solutions in developing countries; and £200 million for the Lowering Emissions by Accelerating Forest Finance (LEAF) Coalition to protect tropical forests.