How Can Data, Technology, and the Private Sector Combat Climate Change?

Finance Takes Center Stage at COP26: A New Era for Climate Action

For the first time, finance has emerged as a pivotal theme at COP26, showcasing the industry’s essential role in driving the transition to a net-zero economy. Attending as a participant, Finextra engaged with the inaugural "Green Horizon Summit" organized by the Green Finance Institute, in partnership with the City of London Corporation, which features daily morning sessions throughout the conference.

The opening panel, moderated by Axel Threlfall, editor-at-large at Reuters, included prominent figures such as Ruth Porat, CFO of Alphabet; Lord Stern, chair of the Grantham Research Institute on Climate Change; Mark Carney, UN special envoy for climate action; and Emma Howard Boyd, chair of the Environment Agency and interim chair of the Green Finance Institute. The discussion centered on the private sector’s potential to expedite the net-zero transition and highlighted the importance of accurate data and green technology in combating climate change.

Mobilizing Capital for Climate Action

Following the conclusion of the World Leaders’ Summit, numerous governmental commitments to combat climate change were announced, including:

1. The UK’s initiative to halt global deforestation by 2030, backed by $3 billion in green investments for developing nations.
2. The Rockefeller and Ikea foundations’ launch of the Global Energy Alliance for People and Planet, pledging $10 billion to support renewable energy.
3. India’s commitment to achieving net-zero emissions by 2070, with expectations for this timeline to advance as the nation progresses on its green path.
4. Brazil’s promise to halve its greenhouse gas emissions by 2030.
5. The United States’ plans to regulate methane emissions, particularly in the oil and gas sectors.
6. A partnership between the UK and India to develop a renewable solar grid across 140 countries.

While these commitments are promising, many experts agree that public finance alone will be insufficient. There is a pressing need to expand private green finance opportunities to redirect global capital toward sustainable investments.

Mark Carney emphasized the urgency for action during the conference, stating, “We are oriented towards action—more announcements are forthcoming. The financial resources necessary to limit global warming to 1.5 degrees are available, but mobilizing them will require substantial effort.” He underscored the importance of clear policy commitments and establishing a carbon price around $75 per ton by 2030 as critical factors for effective capital allocation.

Promoting Collaboration Across Sectors

Ruth Porat stressed the necessity for collaboration between the private and public sectors, asserting that data is fundamental to driving change. “There is no siloed solution,” she remarked, highlighting the need for cross-sector dialogue and innovation. With the UK government mandating that large enterprises disclose climate-related data in compliance with the TCFD recommendations, it has positioned itself as the first G20 nation to enact such regulatory measures.

Carney advocated for universal adherence to TCFD, emphasizing its role in addressing the data disparities that hinder progress. He noted the diverse range of standards available, underscoring the urgency to establish a unified framework for companies to report their environmental commitments and performance accurately.

Having achieved carbon neutrality in 2007 and matching all of its annual electricity consumption with renewable energy in 2017, Google has ardently supported TCFD compliance. Porat outlined Google’s recent climate targets, including providing sustainable living options to one billion people by 2022 and transitioning to 24/7 carbon-free energy by 2030.

Leveraging Technology in the Sustainability Shift

Porat illustrated how technology can significantly mitigate climate change. Utilizing geospatial data and analytics allows companies to evaluate their supply chain impacts globally. Technology can also empower consumers, as exemplified by Google’s initiative to provide carbon footprint information for travel options.

Lord Stern emphasized the need for informed consumer choices and questioned how to scale solutions effectively to address the climate crisis. He stressed that connecting data analysis with an understanding of its implications represents a pivotal development story for the 21st century.

“By anchoring our efforts in data,” Stern stated, “we can achieve consistency in reporting and accountability.”

Embracing AI for Sustainable Solutions

The potential of artificial intelligence (AI) presents exciting opportunities in the fight against climate change. Collaborating with DeepMind, Google successfully enhanced energy efficiency in its data centers, reducing energy consumption by approximately 30%. Porat noted that such technological advancements are applicable across various industries.

However, stakeholders must avoid acting in isolation. Achieving substantial progress necessitates addressing scope 3 emissions and fostering collaborative relationships throughout the supply chain. As Porat articulated, “It’s not just about my operations; it’s about everyone. We cannot afford to operate in silos.”

The Intersection of Finance and Technology

The growing demand for sustainable investing, paired with an undersupply of suitable products, presents significant opportunities for both private and public sectors. The discussions at COP26 reaffirmed that finance, in tandem with technology, can drive the objectives outlined in the Paris Agreement. Although current solutions are not flawless, the engagement of top minds across fields signals promising potential.

Looking ahead, COP26 represents a critical juncture for global finance, calling for commitments exceeding $100 trillion over the next three decades. Additionally, banks require clear guidelines to inform their investment decisions. Access to reliable data is essential for stakeholders—including NGOs, scientists, and consumers—to foster confidence in the process.

COP26 may serve as an unprecedented opportunity for finance to actively contribute to a sustainable future.