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US Treasury secretary Janet Yellen introduced a collection of voluntary “principles” to spur extra non-public sector money into climate and clear vitality tasks and fight greenwashing, in response to what she described because the “significant economic costs” from world warming.
In a speech delivered in New York throughout climate week, going down alongside the UN common meeting, Yellen warned that document heatwaves and unprecedented wildfires threatened to be a serious economic drag.
Yellen stated that climate change offered an funding alternative for US firms, citing analysis estimating greater than $3tn was wanted to chop emissions annually between now and 2050, together with within the US.
At the identical time, the heads of state of 17 international locations together with France, Spain, Denmark and Kenya, stated funding in applied sciences akin to carbon seize and storage had solely a “minimal” position to play in decarbonising vitality techniques. The expertise will not be but working at scale, but is relied upon by fossil gasoline producers to make a case for brand spanking new tasks.
“We cannot use it to greenlight fossil fuel expansion,” stated the nation leaders. “Restoring and protecting carbon sinks should be a top priority. We must set and meet ambitious global targets for renewable energy and energy efficiency, as part of a just and equitable transition that delivers global clean energy access.”
Yellen additionally emphasised that monetary establishments’ web zero greenhouse fuel emission commitments ought to promote “consistency and credibility”.
“Without considering these factors, financial institutions risk being left behind with stranded assets, outdated business models and missed opportunities to invest in the growing clean energy economy,” Yellen stated.
The Treasury suggestions included that monetary establishments’ climate commitments ought to use credible metrics, develop an implementation technique, be clear about their pledges and progress, and account for environmental justice. be in step with limiting the rise in world temperatures to 1.5C since pre-industrial instances.
The world has already warmed by no less than 1.1C and endured its hottest June to August season on document.
At the New York climate week occasion, Yellen additionally met with finance executives together with BlackRock chief govt Larry Fink and HSBC chief govt Noel Quinn to debate the measures.
Alongside the Treasury announcement, the coalition of monetary establishments, generally known as Glasgow Financial Alliance for Net Zero, launched a session doc on methods for monetary establishments.
The paper by Gfanz, which is co-chaired by former Bank of England governor Mark Carney, goals to develop methods to measure reductions of emissions via applied sciences, the phaseout of main polluting property akin to coal vegetation, or funding firms which have plans to shift their enterprise in step with a purpose to restrict world warming to 1.5C.
However, the Gfanz plan permits for absolute emissions to proceed to rise briefly.
“These frameworks support financing companies with high emissions that have credible plans to get them down,” stated Carney. “It is a viable strategy to see your portfolio emissions go up while you are financing to get emissions in the businesses you’re investing in down.”
The world’s 60 largest banks by property have invested $5.5tn within the fossil gasoline business because the Paris accord in 2015 to restrict world warming was signed by nearly 200 international locations, knowledge from the Rainforest Action Network marketing campaign group has proven.
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