More public money is needed to fund the global fight against climate change but the private sector also needs to step up, Chancellor Rishi Sunak has said.
The Chancellor said governments of developed nations are going to meet their six-year-old promise to send 100 billion US dollars (£73 billion) to developing countries in 2023, three years behind target.
“While we know we are not yet meeting it soon enough, we will work closely with developing countries to do more and to reach the target soon,” he told the Cop26 climate conference in Glasgow.
But he added: “Public investment alone isn’t enough, so our second action is to mobilise private finance.”
The Chancellor announced that financial institutions controlling 40% of global assets would align themselves to the Paris Agreement’s 1.5C limit for global warming.
In total, 450 institutions have signed up to the so-called Glasgow Financial Alliance for Net Zero (Gfanz), an organisation led by the former Bank of England Governor Mark Carney.
“The 130 trillion dollars that the Chancellor announced is more than is needed for the net-zero transition globally,” Mr Carney said on Wednesday.
He added: “What you’re hearing today is that the money is here, but that money needs net-zero aligned projects.”
Mr Sunak said: “Six years ago Paris set the ambition. Today in Glasgow we’re providing the investment we need to deliver that ambition.”
He was speaking ahead of Janet Yellen, the US Treasury Secretary, who said climate change was a huge opportunity for businesses.
“The old notions of why the private sector should decarbonise because the planet must be put before profit are no longer universally true,” she said.
“Green technologies have cost curves that continue to plunge, in many cases it is simply cost-effective to go green.
“Addressing climate change is the greatest economic opportunity of our time.”
Finance ministers are meeting in Glasgow on Wednesday following the meetings between world leaders on Monday.
Mr Sunak also promised to turn the UK into what he said would be the world’s first net-zero aligned financial centre.
He said listed companies in the UK would need to publish a transition plan that sets out their path to green their businesses.