At Ethical Finance 2021, the Path to COP26 campaign signatories issued an open letter to Alok Sharma, highlighting the need for the finance sector  to act together to achieve decisive action at COP26, the most important summit since Paris in 2015.

Read the full letter here.

The economy needs to decarbonise at a rate of 11% every year to meet our 2050 Paris commitments, and every year this fails to happen, the annual rate of required decarbonisation increases. The scale of economic change required is unprecedented and global leadership needs to set clear expectations for society and business to deliver. Market forces, divestment and shareholder activism are making a difference, but they are not enough. Government policy is imperative to effecting the necessary changes, but recent research has shown that, on current plans, governments’ policies will only deliver a one-third reduction in the carbon intensity of balance sheets by 2050.

The letter calls on Alok Sharma to deliver a deal that contains credible, timebound, investable plans for Net Zero.

In your role as COP President, we ask that your negotiations deliver a deal that is not only unambiguous in delivering a fair set of country nationally determined contributions (NDCs) but also delivers credible timebound transition plans for reducing carbon intensity through pricing, taxation and appropriate trading mechanisms. The Pensions Scheme Act 2021 is a demonstration of how greater transparency in carbon intensity and climate risk can be achieved. The finance sector now needs clear investment proposals from governments and companies based on an understanding of how NDC transition plans will affect operations across the globe.