Cheap electricity, clean air and insulated homes: Sunak outlines green financial 'vision'

3 November 2021, 10:30

Chancellor Rishi Sunak has outlined the three financial steps needed to achieve his "vision" of a green future, where people have access to things like cheap and reliable electricity, insulated homes and environmental defences.

Speaking to delegates at COP26, Mr Sunak acknowledged the scale of the challenge faced by global economies but said the fact "the will is there" left him feeling optimistic.

"It's easy to feel daunted by the scale of the challenge that we face - by sea levels rising, droughts and wildfires spreading, people forced out of their homes," said Mr Sunak.

But he said he felt positive because "this is the first COP to bring together so many of the world's finance ministers, business ministers and investors with such a clear, common purpose - to deliver the promise made in Paris six years ago to direct the world's wealth to protect our planet".

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He said that 80 per cent of the global economy had made net zero or carbon neutral commitments, and said the next challenge is to "deploy the investment" needed to meet the targets around the world.

He explained there were three steps to achieve that - increasing public investment, mobilising private finance and 'rewiring' the global financial system.

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For the first part of his plan, he said the G20 was "stepping up" and promised to meet the target of providing $100b in climate finance to developing countries.

Whilst he acknowledged they were "not yet meeting it soon enough", he pledged $500b over the next five years to help poorer countries - who are generally least responsible for climate change but most vulnerable to its impacts - adapt.

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For the second step, he said there was over $130 trillion of private capital waiting to be deployed - and deployment would be made easier with the third step to "rewire the entire global financial system for net zero".

He explained that greater transparency, better and more consistent climate data and measures such as mandatory sustainability disclosures would make it easier to distribute private finance to where it was most needed, and hailed the UK's role in such plans.

"I'm proud that the UK is playing its part," said the Chancellor.

"We've already made it mandatory for businesses to disclose climate-related financial information with 35 other countries signing up to do the same.

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"Today I'm announcing that the UK will go further and become the first ever net zero aligned financial centre.

"This means we are going to move towards making it mandatory for firms to publish a clear, deliverable plan setting out how they will decarbonise and transition to net zero with an independent taskforce to define what's required."

He added: "Six years ago, Paris set the ambition.

"Today, in Glasgow, we're providing the investment we need to deliver that ambition."

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Mr Sunak acknowledged that global finance could feel "remote and abstract" but promised it would make "a tangible difference to people's lives" in the form of cheap and reliable electricity for people in need, coastal defences for the parts of the world that really need it, and fresh water, clean air and insulated homes for everyone.

"That's the vision we're asking you to commit to," said Mr Sunak, closing his speech.

"That's the opportunity we're asking you to invest in, and that's the work that we're asking you to begin today."