Financial community commits $130 trillion US to wean global economy off fossil fuels

Our planet is changing. So is our journalism. This story is part of a CBC News initiative entitled Our Changing Planet to show and explain the effects of climate change and what is being done about it.

As a former central banker on two continents, Canada's Mark Carney has honed the dark art of haranguing and arm-twisting members of the global investment community better than almost anyone.

But his latest task, as the United Nations' special envoy on climate action and finance, involved some pretty daunting numbers.

Carney, who headed up the Bank of Canada and then the Bank of England between 2008 and 2020, was tasked to find more than $100 trillion US in capital from the global financial community to help drive the transformation of the world's economy from fossil fuels to a new age powered by clean energy.

"It's a mammoth transition," Carney told CBC News at COP26, the UN's climate change conference, in Glasgow, Scotland. The Conference of Parties (COP) meets yearly to implement the UN's Framework Convention on Climate Change, adopted in the early 1990s, and subsequent climate agreements.

"It's absolutely enormous. It's bigger than global GDP."

On Wednesday, designated finance day at the Glasgow conference, Carney announced success, of sorts.

"We have banks, asset managers, pension funds, insurance companies from around the world — more than 45 countries — and their total resources, totalling $130 trillion US," said Carney, $30 trillion more than the target.

"So one of the key messages of this COP is: the money is there." 

The Conference of Parties (COP), as it's known, meets every year and is the global decision-making body set up in the 1990s to implement the United Nations Framework Convention on Climate Change and subsequent climate agreements.

Carney says more than 450 firms — including Canada's big five chartered banks — have committed to supporting the goals of what's become known as the Glasgow Financial Alliance for Net Zero (GFANZ).

Net zero means countries are no longer adding heat-trapping greenhouse gases to the atmosphere. Some greenhouse gases might still be emitted, but they would be balanced off or "cancelled out" by the removal of an equivalent amount of greenhouse gases. The concept is similar to carbon neutrality but includes more than just carbon dioxide emissions.

Firms that sign onto the GFANZ agreement are promising to abide by 24 financial initiatives that will signal to their customers, shareholders and investors that they are making green investments a priority.

The initiatives include climate-related reporting of their investments and transparency about climate-related financial risks.