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| COP26: UK firms forced to show how they will hit net zero | COP26: UK firms forced to show how they will hit net zero |
| (32 minutes later) | |
| Most big UK firms and financial institutions will be forced to show how they intend to hit climate change targets, under proposed Treasury rules. | Most big UK firms and financial institutions will be forced to show how they intend to hit climate change targets, under proposed Treasury rules. |
| By 2023, they will have to set out detailed public plans for how they will move to a low-carbon future - in line with the UK's 2050 net-zero target. | By 2023, they will have to set out detailed public plans for how they will move to a low-carbon future - in line with the UK's 2050 net-zero target. |
| An expert panel will set the standards the plans need to meet to ensure they are not just spin. | An expert panel will set the standards the plans need to meet to ensure they are not just spin. |
| Any commitments will not be mandatory. Green groups say this is not enough. | Any commitments will not be mandatory. Green groups say this is not enough. |
| Net zero is when a business or a country achieves an overall balance between the amount of carbon it is emitting and the carbon that it's removing from the atmosphere. | Net zero is when a business or a country achieves an overall balance between the amount of carbon it is emitting and the carbon that it's removing from the atmosphere. |
| Firms and their shareholders will be left to decide how their businesses adapt to this transition, including how they intend to decarbonise. | Firms and their shareholders will be left to decide how their businesses adapt to this transition, including how they intend to decarbonise. |
| And although the plans will need to be published, the government said "the aim is to increase transparency and accountability" and the UK was not "making firm-level net-zero commitments mandatory". | |
| Speaking at the COP26 climate summit, Chancellor Rishi Sunak claimed the UK was leading the world in becoming the "first-ever net zero aligned global financial centre". | Speaking at the COP26 climate summit, Chancellor Rishi Sunak claimed the UK was leading the world in becoming the "first-ever net zero aligned global financial centre". |
| He said the changes would mean: "Better and more consistent climate data; sovereign green bonds; mandatory sustainability disclosures; proper climate risk surveillance; and proper global reporting standards." | He said the changes would mean: "Better and more consistent climate data; sovereign green bonds; mandatory sustainability disclosures; proper climate risk surveillance; and proper global reporting standards." |
| In total, 450 firms controlling 40% of global financial assets - equivalent to $130tn (£95tn) - have agreed to commit to limit global warming to 1.5C above pre-industrial levels. | In total, 450 firms controlling 40% of global financial assets - equivalent to $130tn (£95tn) - have agreed to commit to limit global warming to 1.5C above pre-industrial levels. |
| What does net zero mean? | What does net zero mean? |
| Green investing: How your savings can fight climate change | Green investing: How your savings can fight climate change |
| 'Not fast enough' | 'Not fast enough' |
| David Barmes, senior economist at the campaign group Positive Money, said the intention was positive, but that financial firms were still "pouring billions into environmentally harmful projects." | David Barmes, senior economist at the campaign group Positive Money, said the intention was positive, but that financial firms were still "pouring billions into environmentally harmful projects." |
| "We need public institutions rather than bank chief executives to lead the way in setting standards and delivering green investment." | "We need public institutions rather than bank chief executives to lead the way in setting standards and delivering green investment." |
| Mark Campanale, founder and executive chair of Carbon Tracker Initiative, praised the ambition of the plans, but said details of how it would work were still unclear. | Mark Campanale, founder and executive chair of Carbon Tracker Initiative, praised the ambition of the plans, but said details of how it would work were still unclear. |
| "None of the financial assets announced are currently aligned with net-zero and no group of companies can say they are meeting the Paris target by continuing to invest in fossil fuels, so that needs to change considerably before London can be lauded as the world's first net-zero financial centre and a model for the world," he said. | "None of the financial assets announced are currently aligned with net-zero and no group of companies can say they are meeting the Paris target by continuing to invest in fossil fuels, so that needs to change considerably before London can be lauded as the world's first net-zero financial centre and a model for the world," he said. |
| Shaun Spiers, executive director of environmental think tank Green Alliance, said that more UK public sector funding was needed. | Shaun Spiers, executive director of environmental think tank Green Alliance, said that more UK public sector funding was needed. |
| "Private sector investment is vital, but it will be much easier to achieve on the back of serious investment by the chancellor," he said. | "Private sector investment is vital, but it will be much easier to achieve on the back of serious investment by the chancellor," he said. |
| However, a coalition of finance groups led by former Bank of England governor Mark Carney said there was enough finance committed to keep global warming to 1.5 degrees centigrade. | However, a coalition of finance groups led by former Bank of England governor Mark Carney said there was enough finance committed to keep global warming to 1.5 degrees centigrade. |
| The Glasgow Financial Alliance for Net Zero (GFANZ) said more than $130trn (£95trn) of private capital "is now committed to transforming the economy for net zero". | The Glasgow Financial Alliance for Net Zero (GFANZ) said more than $130trn (£95trn) of private capital "is now committed to transforming the economy for net zero". |
| In practice, this means that bank loans which would go to an oil field, or a coal mine, are diverted to renewable energy or to a mortgage product that subsidises highly efficient homes. | In practice, this means that bank loans which would go to an oil field, or a coal mine, are diverted to renewable energy or to a mortgage product that subsidises highly efficient homes. |
| Bank bosses will also be expected to have tough conversations with their customers who want to build coal power stations, pulling funding in advanced nations now, and developing countries beyond the next decade. | Bank bosses will also be expected to have tough conversations with their customers who want to build coal power stations, pulling funding in advanced nations now, and developing countries beyond the next decade. |
| Can COP26 really save the planet? | Can COP26 really save the planet? |
| What's the climate impact of private jets at COP26? | What's the climate impact of private jets at COP26? |
| Is Greta Thunberg right about UK climate figures? | Is Greta Thunberg right about UK climate figures? |
| Transition plans | Transition plans |
| Under the new Treasury rules, financial institutions and companies with shares listed on the London Stock Exchange must come up with net-zero transition plans, which will be published from 2023. | Under the new Treasury rules, financial institutions and companies with shares listed on the London Stock Exchange must come up with net-zero transition plans, which will be published from 2023. |
| The strategies will need to include targets to reduce greenhouse gas emissions, and steps which firms intend to take to get there. | The strategies will need to include targets to reduce greenhouse gas emissions, and steps which firms intend to take to get there. |
| A taskforce made up of industry leaders, academics, regulators and civil society groups will set a science-based "gold standard" for the plans in order to guard against so-called "greenwashing" - where environmental initiatives are more about marketing than substance. | A taskforce made up of industry leaders, academics, regulators and civil society groups will set a science-based "gold standard" for the plans in order to guard against so-called "greenwashing" - where environmental initiatives are more about marketing than substance. |
| However, the government said there was "not yet a commonly agreed standard for what a good quality transition plan looks like". | However, the government said there was "not yet a commonly agreed standard for what a good quality transition plan looks like". |
| Meanwhile, Mr Sunak is also expected to pledge that a target for developed countries to send $100bn (£720m) a year to those that are less developed - to help support their transition to net zero - will be achieved by 2023. | Meanwhile, Mr Sunak is also expected to pledge that a target for developed countries to send $100bn (£720m) a year to those that are less developed - to help support their transition to net zero - will be achieved by 2023. |
| Why the COP26 climate summit is important | Why the COP26 climate summit is important |
| Simple guide to climate change | Simple guide to climate change |
| What will climate change look like for you? | What will climate change look like for you? |
| Will the UK meet its climate targets? | Will the UK meet its climate targets? |
| How extreme weather is linked to climate change | How extreme weather is linked to climate change |
| Alison Rose, chief executive of Natwest, told the BBC Radio 4 Today programme, it had started measuring the emissions on its balance sheet to help it track progress, saying "transparency was critical". | Alison Rose, chief executive of Natwest, told the BBC Radio 4 Today programme, it had started measuring the emissions on its balance sheet to help it track progress, saying "transparency was critical". |
| She said the bank was working with the oil and gas industry "to develop credible transition plans so we can track progress and work with our customers". | She said the bank was working with the oil and gas industry "to develop credible transition plans so we can track progress and work with our customers". |
| But Ms Rose said its main focus was helping small firms where there were "real business opportunities" in "adopting sustainable supply chain [and] sustainable business practices". | But Ms Rose said its main focus was helping small firms where there were "real business opportunities" in "adopting sustainable supply chain [and] sustainable business practices". |
| Kay Swinburne, vice-chairman of financial services at KPMG UK, said the announcement on UK firms would provide the financial services industry with a "valuable set of unified metrics to measure progress towards decarbonisation". | Kay Swinburne, vice-chairman of financial services at KPMG UK, said the announcement on UK firms would provide the financial services industry with a "valuable set of unified metrics to measure progress towards decarbonisation". |
| "It is brave to put a gold standard in place for all companies raising funding," she added. | "It is brave to put a gold standard in place for all companies raising funding," she added. |
| And Dr Ben Caldecott, director of the UK Centre for Greening Finance and Investment, said the plans would "spur demand for green finance and accelerate decarbonisation, not just in the UK but wherever UK firms do business". | And Dr Ben Caldecott, director of the UK Centre for Greening Finance and Investment, said the plans would "spur demand for green finance and accelerate decarbonisation, not just in the UK but wherever UK firms do business". |
| Follow the money to net zero. That is the plan unveiled today, with two-fifths of the world's financial assets, $130 trillion, under the management of banks, insurers and pension funds that have signed up to 2050 net-zero goals including limiting global warming to 1.5C. | Follow the money to net zero. That is the plan unveiled today, with two-fifths of the world's financial assets, $130 trillion, under the management of banks, insurers and pension funds that have signed up to 2050 net-zero goals including limiting global warming to 1.5C. |
| This means that the giant laser beam of global finance will be fired towards technologies that lower and eradicate carbon emissions, and away from "brown holdings" of investments in coal, oil and gas. | This means that the giant laser beam of global finance will be fired towards technologies that lower and eradicate carbon emissions, and away from "brown holdings" of investments in coal, oil and gas. |
| But can such fundamental ecological, economic and social change really be achieved more through financial carrot than by regulatory stick? This position suits politicians who don't necessarily want to tell their voting public to consume or travel less than they are used to. | But can such fundamental ecological, economic and social change really be achieved more through financial carrot than by regulatory stick? This position suits politicians who don't necessarily want to tell their voting public to consume or travel less than they are used to. |
| By changing the financial system, their hope is that the trajectory of every economic sector, from energy to transport, food to clothing, how we live, work and what we consume will decarbonise of their own accord. | By changing the financial system, their hope is that the trajectory of every economic sector, from energy to transport, food to clothing, how we live, work and what we consume will decarbonise of their own accord. |
| Read more from Faisal | Read more from Faisal |
| JOBS THAT COULD SAVE THE WORLD: Four people whose careers reduce our impact on the planet | JOBS THAT COULD SAVE THE WORLD: Four people whose careers reduce our impact on the planet |
| EDUCATORS OR ACTIVISTS?: What role should the media play in climate change? | EDUCATORS OR ACTIVISTS?: What role should the media play in climate change? |