New initiative will work to meet goals of Paris Agreement through mobilization and deployment of private sector capital
Today, during the week of the 73rd UN General Assembly in New York, United Nations Secretary-General António Guterres tapped Michael R. Bloomberg, the UN Special Envoy for Climate Action, to lead an initiative that will support a global mobilization of private capital in response to the challenge of climate change. The Climate Finance Leadership Initiative will work to fulfill the private financing objectives included in the landmark Paris Agreement, which reaffirmed the goal of mobilizing at least $100 billion per year by 2020 through a combination of public development finance and private foreign direct investment.
“Mobilizing resources from the public and private sectors is critical to tackling the issue of climate change,” said Secretary-General Guterres. “In this year of action leading up to my climate summit, I am pleased Mike Bloomberg, my Special Envoy for Climate Action, has agreed to convene private sector leaders through this initiative and work closely with leading governments to help ensure we can meet the objectives of the Paris Agreement.”
Finance is critical to achieving the nationally determined goals laid out by governments under the Paris Agreement, and to enabling the enhanced ambition of cities, states and regions to contribute to such goals. The Climate Finance Leadership Initiative will draw members from top international financial firms and corporations to catalyze scaled up investments in clean energy and climate resilience projects around the world, in both developed and emerging markets. The initiative will have a one-year term culminating in a UN Climate Summit to be held in September 2019. Founding members will be announced before the end of the year.
“The market’s allocation of capital is a powerful weapon in our fight against climate change. As climate risks and opportunities become more transparent, investors and businesses are increasing financing for climate solutions,” said Mr. Bloomberg. “I’m glad to help the Secretary-General accelerate this critical transition over the coming year.”
Earlier today, Secretary-General Guterres invited President of France Emmanuel Macron, along with Jamaican Prime Minister Andrew Holness, to lead on the issue of scaling up climate finance over the coming year. The Climate Finance Leadership Initiative will work closely with the Government of France in supporting its presidency of the G7 in 2019, and will provide a first report to G7 Finance Ministers by July 2019.
“Thanks to international initiatives such as the One Planet summits in 2017 and 2018, and the close cooperation with UN Special Envoy for climate action Michael Bloomberg, we are seeing for the first time since the Paris Agreement an extraordinary dynamic between the public and the private sectors, the scientific community and the finance leaders, CEOs and NGOs, catalyzed and galvanized around a single solutions-oriented climate agenda,” said President Macron. “We must accelerate again our efforts in the months to come.”
As Chair of the Financial Stability Board Task Force on Climate-related Financial Disclosures, Bloomberg has led private-sector efforts to categorize, identify, disclose and manage climate-related risks. The new Climate Finance Leadership Initiative will build on this work and seek to catalyze new investment flows, by steering a greater share of capital markets activity to climate-related projects and opportunities worldwide. The initiative will convene a wide range of partners that are supporting and testing mechanisms to accelerate capital deployment to renewable energy and climate resilience projects.
To support the replication of solutions, the initiative will work closely the Global Innovation Lab for Climate Finance, a public-private partnership supported by Bloomberg Philanthropies and other philanthropic foundations and governments. Members of the Lab include leading development finance institutions such as AFD (France) and BNDES (Brazil), multilateral organizations such as the World Bank Group, and private financial firms such as BlackRock, Bank of America Merrill Lynch, and India’s Yes Bank. The Lab is holding its annual meeting on the sidelines of the One Planet Summit in New York this week.
Also today, Bloomberg announced he will help form a Wall Street Group on Sustainable Finance to encourage more climate-friendly and sustainable finance innovation across the U.S. capital markets. The group is the latest addition to a growing roster of “Financial Centers for Sustainability,” including the City of London’s Green Finance Initiative, the Paris-based Finance for Tomorrow Initiative, and over fifteen other related initiatives from Brazil to Germany to China and beyond.
“Wall Street has been at the heart of many key sustainable finance innovations and it’s great to see this new expression of common purpose,” said Erik Solheim, Executive Director of UN Environment, which hosts the international network of financial centers. “Fulfilling America’s pledge on climate change means America’s leading financial firms must do their part. Today’s announcement demonstrates that they are. By collaborating with each other and sharing best practices with their counterparts around the world, Wall Street firms can play a significant role in accelerating the financing of climate action and sustainable development.”