Over the Horizon

  • 13 November 2020
  • Blog | Green Finance | Blog

Simon Thompson, Chief Executive

Like many, I attended and greatly enjoyed the Green Horizon Summit #GH2020, hosted this week by the UK’s Green Finance Institute and the City of London Corporation, marking one year to COP26 in Glasgow in November 2021.

For me, the standout moment and key call to action came from @COP26 Mark Carney, the UN Special Envoy for Climate Action and Finance as he launched “Building a Private Finance System for Net Zero – Priorities for private finance for COP26”.  125 countries have now committed to net zero by 2050 at the latest, requiring systemic, whole economy transitions.  Every economic entity will need to align their own strategies, operations and activities with below 2 degrees of global warming, and the finance sector – as set out in Article 2.1c of the Paris Agreement – must play a leading role, and the majority of capital required to fund the global transition to net zero will come from the private sector.

As Carney writes: the objective for the private finance work for COP 26 is simple: ensure that every professional financial decision takes climate change into account.  This may be simple and straightforward in terms of language, but is hugely ambitious and highly complex to implement.  The COP 26 Private Finance Hub will address this through developing a framework based on 4 pillars: reporting, risk management, returns and mobilisation. 

In my view, this is necessary, but not sufficient.  Ensuring that every financial decision takes climate change into account requires not only institutions, but also individuals to align their activities and operations with this goal.  Financial decisions are not taken by institutions, but by individuals – and it is the individual professionals working in accounting, business, banking, finance and professional services who need to take personal responsibility for taking climate change (and, I would argue, broader sustainability factors too) into account in every decision, and when advising colleagues, clients and customers. 

To ensure that every professional financial decision takes climate change into account a fifth pillar is required, therefore.  And that is to ensure that every finance professional – not just sustainability professionals - complete certified programmes of initial and continuing professional education to develop and demonstrate at least a basic knowledge of green and sustainable finance principles and practice.  

Simon Thompson, Chief Executive

To read more about the highlights of the Green Horizon Summit please see here.