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UN Climate Change publishes the Net Zero roadmap for financial markets
08/11/2021 Since 1 month

The UN Climate Change Secretariat has published a new document stating 2050 Vision and Summary in the context of the Climate Action Pathway – Finance theme.

The Vision statement defines that “by 2050, financial markets, institutions and systems are in place to support and fund a resilient zero-carbon… As a result, flows of capital have been redirected to sustainable and climate-resilient development”.

This pathway defines two high-level impact areas that global efforts will need to focus on to realize this vision for 2050: 1) Transitioning finance in line with a 1.5 ºC, resilient future and 2) Financing the transition in line with a 1.5 ºC, resilient future.

In order to transition finance, and finance the transition, in line with a 1.5 °C, resilient future, the document includes the definition of road mapping actions needed to be taken by different actors, on five key topics / impact areas:

• Closing the ‘valuation gap’, correcting market failures and unpriced externalities
• Tackling the ‘tragedy of the horizon’ and short-termism
• Creating systemic transformation tools and building capacity
• Improving incentives and risk management
• Zero carbon, resilient infrastructure and real assets

The report also covers the progress already made in transition finance in the last 18 months. A number of initiatives have been launched to enable financial institutions to set and achieve net zero operational and financed emissions by 2050, including: UN-convened Net-Zero Asset Owner Alliance (NZAOA) (currently 42 institutional investors with USD 6.6 trillion in assets under management); the Paris Aligned Investment Initiative’s Net Zero Asset Owner Commitment; the Net Zero Asset Managers Initiative (currently 87 signatories with USD 37 trillion in assets under management); and the Net-Zero Banking Alliance (45 banks with USD 29 trillion in assets under management).

This post is also available in: Spanish

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