Around 40% of global finance signs up to Paris climate targets

By August Graham, PA City Reporter

Institutions that control around 40% of global financial assets have aligned themselves to limit global warming to 1.5C above pre-industrial levels.

Chancellor Rishi Sunak is set to reveal that 450 firms from the financial industry that control 130 trillion dollars (£95 trillion) in assets have made the commitments in a speech on Wednesday.

They will align their climate goals to the Paris Agreement, including the 1.5C target.

As finance ministers meet in Glasgow for the Cop26 climate conference, the Chancellor will also reveal plans to make the UK a net-zero financial centre.

The plans will force UK financial institutions and listed companies to publish their plans on how to transition to net zero.

These plans will be held to what the Chancellor hopes will be a greenwashing-proof new “gold standard”.

The rules will be drawn up by a new taskforce with members from universities, civil society groups, industry and regulators.

The plans will need to include high-level targets to reduce greenhouse emissions, the steps companies plan to take to get there and milestones ahead of 2050.

But although the plans will need to be published, the aim is simply to increase transparency.

The Government will then leave it up to the market to determine if the transition plans are adequate or credible.

Companies will be expected to start publishing their transition plans in 2023.

In his speech the Chancellor will say that progress has been made to “require the entire global financial system for net zero”.

He will also call on companies to “mobilise private finance quickly and at scale,” and say that governments should put laws in place that can free up private cash.

In 2015 developed countries promised to send 100 billion dollars (£73 billion) to those that are less developed to help support their transition to net zero.

However the target is unlikely to be met until 2023.