During the ‘Financing the Net-Zero Transition’ panel at Davos, Mark Carney, the UN’s special envoy for climate action and finance, emphasized the crucial role of the private financial sector in tackling climate change. He urged financial professionals to engage in the upcoming COP26 summit in Glasgow, stating, “If you are part of the private financial sector and you are not part of the solution […] you will have consciously decided not to align with net zero. This COP is focused on net-zero objectives. If you’re not involved, it’s your choice to remain outside.”
Carney tempered his warning by highlighting the goodwill and support from COP26, which has attracted commitments from 127 countries to achieve net-zero emissions.
The discussion reflected on the need for “blended finance,” which aims to foster collaboration between public and private sectors to meet climate objectives. Stephanie von Friedeburg, managing director and interim COO of the International Finance Corporation (IFC), pointed out the scarcity of bankable projects in emerging markets, urging efforts to de-risk these initiatives and draw in sponsors capable of developing significant net-zero projects.
Carney noted a disparity in the commitment to net-zero across sectors, specifically mentioning the necessity for multilateral development banks and development finance institutions to align with these objectives as well. “It would be peculiar if the private financial sector and governments are aligned with net-zero by Glasgow, yet the multilateral development bank community is not,” he remarked. “Bridging this gap is essential for unlocking significant blended finance flows into emerging and developing economies, which is vital for the overall architecture of climate finance.”
Reiterating the importance of political will, von Friedeburg emphasized that while the private sector must lead in addressing climate issues, it cannot do so independently. She stated, “We need governments to establish the right policy and regulatory framework and to foster public-private partnerships that attract private investment to develop and finance impactful projects.”
Former US Vice President Al Gore contributed a sense of optimism to the conversation, citing the immediate commitments made during the Biden-Harris administration and significant pledges from the EU, China, Japan, and South Korea. He described the current era as an unprecedented global transition, often referred to as the sustainability revolution, driven by advanced digital technologies.
Quoting Nelson Mandela, Gore remarked, “It is always impossible until it’s done,” and emphasized that the convergence of public and private efforts, fueled by a collective global consciousness, will drive the financing to support these commitments and secure our future.