Last year at the climate talks in Glasgow, we saw the creation of the Glasgow Financial Alliance for Net Zero (GFANZ), a group of large asset owners committed to contributing more than $130 trillion in private capital to reach a net zero global economy. A year later, many institutions are now more lukewarm on this commitment, with some banks threatening to leave GFANZ if it chooses to require them to demonstrably phase out financing for new fossil fuels, including for new coal. We hope to see financial institutions during COP27 be held accountable for their pledges and offer real action, both in terms of financial commitments and climate risk management practices.
We also need governments to deliver on outstanding commitments to provide public capital for climate finance in the developing world. The developed world has not yet hit the $100 billion a year it promised in climate talks in Copenhagen in 2009 for efforts to help the least developed and most vulnerable countries build their resilience to worsening climate impacts while growing their economies in ways that avoid increasing global carbon emissions. The US remains a laggard in this respect, and we need Congress to provide the resources needed to meet President Biden’s pledge of $11.4 billion in climate finance by 2024.
Relatedly, we need to see real progress on the issue of loss and damage at COP27, given that it is a top priority for those countries currently bearing impossible costs in human life and resources from climate impacts. We recognize the political challenges this issue poses for countries such as the US, but these pale in comparison to the existential challenges facing countries that are being hit first and worst by climate-driven disasters at the same time as they bear little to no historical responsibility for the causes of these catastrophic events. The latest signals are that the Biden Administration intends to engage constructively on this issue at COP27, and we hope these foretell forward movement on what has recently proven a major stumbling block in the negotiations.
The threat climate impacts pose from a risk management perspective are now too great to ignore, and those impacts only grow worse if we are not prepared to commit the financing necessary—both for mitigation and adaptation. Governments are now understanding this by encouraging enhanced climate-related disclosure and transparency, but we need more policy.