Financials
We cannot decarbonize the global economy without support from the financial sector – banks, asset managers and investors and public finance – are critical to include in the net zero transition.
Despite progress in energy transition investment, investor appetite for clean technologies often exceeds the volume of investment opportunities. Investors and lenders can work to more systematically align financial flows with a well- below 2ºC pathway, including by partnering with corporations through investing and financing to achieve climate-related targets, transition strategies, and industry-specific transition pathways. Policymakers can target the financial sector by enforcing mandatory reporting and disclosures and to eventually integrate their climate risks into decision making. The ultimate goal is for financial institutions to price the impact of climate change into their investment or lending activities, to mitigate the risk of an economic crisis and progressively shift financial portfolios away from activities not aligned with a low-carbon economy.
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Companies
Corporate climate commitments help establish a culture of transparency in the private sector.
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