Amid increasing pressure on governments to transition to net zero, TheCityUK and PwC are the latest firms to issue a call to leaders for increased climate disclosure, clearer guidance and policies and incentives to decarbonise.
The groups have come together to compile the report Enabling the net zero transition: The role of financial and related professional services, which sets out a 10-point action plan to enable government, regulators and the financial industry to realise the opportunities in green finance and ensure the UK is leading the way.
The report estimates $125trn of investment is required globally to decarbonise the economy, with over $32trn needed by 2030. Around 70% of this investment must be found through private financial markets.
In the action plan, the firms call for governments to publish interim national net-zero capital raising plans, address investment risks though blended finance and facilitate deeper collaboration between policymakers, regulators, corporates and SMEs to scale up investment.
It also calls for further engagement with other jurisdictions to drive global alignment and support the Just Transition.
For disclosures, the plan asks for Taskforce on Climate-related Financial Disclosures requirements to be extended to smaller and privately owned businesses in a proportionate way, and for an increased level of disclosures for direct and indirect GHG emissions. It also asks the government of carry out an assessment of how markets are using climate-related data within its forthcoming update to its Green Finance Strategy.
The report has also focused on carbon pricing calling for a regulatory framework for carbon and environmental credit markets.
Miles Celic, CEO at TheCityUK, commented:“Delivering the transition to net zero will take more than good intentions. It will require the government, regulators, and industry to work in close partnership. We all have our own role to play, and action by one cannot compensate for inaction by another. Financial regulations cannot substitute for government climate policies, and consumer spending choices cannot substitute for public and private investment.
“We are calling on the government to take forward a 10-point action plan to help unlock the vital investment needed to reach our net-zero ambitions. We also need a clear and sustained cross-party commitment to net zero, with well-signalled policies to drive forward proactive decarbonisation across the whole economy.”
Jon Williams, partner at PwC Global Banking & Capital Markets ESG leader and PwC UK Sustainability Chair, said: “There is a strong appetite in the UK to accelerate the reduction in carbon emissions as we move towards net zero, but we are not moving quickly enough. The required effort must come from everyone – from policymakers to business leaders and consumers themselves.
“Given the scale and influence of the UK’s financial and professional services sector, and the required level of investment and advice needed to support the transition to net zero, their role has never been more important.”
Earlier this week, the CEOs of three of the most well known responsible investment organisations wrote to the new UK prime minister Liz Truss calling for clearer net-zero policies that will transform the economy.