Finance took centre-stage at the UN <a href="https://www.thenationalnews.com/world/europe/2021/10/19/what-is-cop26-the-glasgow-climate-change-summit-and-why-it-matters/" target="_blank">Cop26 environment summit in Glasgow</a> on Wednesday, with <a href="https://www.thenationalnews.com/world/cop-26/2021/11/03/uk-to-unveil-plan-for-first-net-zero-financial-centre/" target="_blank">investors committing $130 trillion to tackle climate change</a>. The private sector “wall of capital” from a coalition of banks, insurers and asset managers was praised by UK Chancellor of the Exchequer Rishi Sunak, who said it would provide financial firepower to meet the Paris Agreement goals. But it was not Mr Sunak who brought about this “historic” pact to mobilise the private sector into action; that accolade goes to Mark Carney, the former governor of the Bank of England who stepped down from the role in January last year. Thanks to Mr Carney's efforts since then, $130tn of private finance is now committed to science-based net-zero targets and near-term milestones, through the Glasgow Financial Alliance for Net Zero (GFANZ), which he set up in April. GFANZ members are required to set robust, science-based near-term targets within 12-18 months of joining, with more than 90 of the founding institutions already doing so. “The $130tn that the Chancellor announced is more than is needed for the net-zero transition globally,” Mr Carney told delegates at Cop26 on Wednesday. “The money is here — but that money needs net zero-aligned projects and there's a way to turn this into a very, very powerful virtuous circle — and that's the challenge.” So how did Mr Carney manage to persuade 450 institutions, including HBSC, Bank of America and Santander, to commit to a net-zero future? Mr Carney’s big moment at the climate talks put him among the most prominent speakers on finance day with his plan “to reveal’’ which financial firms are “stepping up.’’ His mission started when he was appointed <a href="https://www.thenationalnews.com/business/economy/bank-of-england-s-mark-carney-accepts-un-climate-finance-envoy-role-1.945443" target="_blank">UN special envoy for climate action</a>, a role he took on immediately after leaving the BoE. The career shift saw him leading a UN push to make the finance sector take proper account of the risks posed by climate change. At the same time he also became Prime Minister Boris Johnson’s finance adviser for the Cop26 summit, with Mr Johnson lauding the appointment, saying Mr Carney would “help reshape finance for a sustainable world”. His green ambitions really came to light when he hosted the three-day <a href="https://www.thenationalnews.com/business/economy/mark-carney-climate-change-is-the-greatest-commercial-opportunity-of-our-time-1.1108518" target="_blank">Green Horizon Summit</a> in November last year, telling banks, insurers and fund managers they must invest in private sector initiatives to profit from “the greatest commercial opportunity of our time” and help companies transition to a net-zero future. The call to action was followed by the April formation of GFANZ, which comprises six groups spanning all corners of the financial industry. The umbrella group, which includes all the major Western banks, as well as insurers and asset managers, was pulled together by Mr Carney who said it needed to find creative ways to channel private money purposefully into investment that advances the UN-backed drive for net-zero greenhouse emissions by 2050. When GFANZ announced at Cop26 that firms responsible for managing $130tn in capital — equivalent to 40 per cent of the world's financial assets — had signed up to assuming a “fair share” of decarbonisation, it was a milestone moment, particularly as the amount was $30tn more than is needed over the next three decades, according to Mr Carney. Some of world’s biggest financial firms only signed up at the last minute, with Wall Street titan JP Morgan Chase & Co, the world’s biggest provider of fossil-fuel finance, only signing up last month, as did Wells Fargo & Co. This is the first of many achievements for Mr Carney, a Canadian who not only steered the Bank of Canada through the 2008 global financial crisis but also saw the BoE through the tumult that followed the 2016 Brexit referendum. He recently dismissed speculation he would enter Canadian politics to position himself as successor to Prime Minister Justin Trudeau, posting on Twitter that he wanted to focus on his environmental responsibilities, which also includes a role heading the green investment programme at Canada's Brookfield Asset Management. Interestingly, Greta Thunberg features in his rise to green prominence. He told the Cop26 climate conference: “I was in the room two years ago in the General Assembly, along with presidents, prime ministers, dignitaries and business leaders." “Greta Thunberg rightly blasted everyone, with words to the effect of you've stolen my dreams and my childhood”, he said. A pool of that capital has now been carved out for the transition in emerging and developing economies, he told Cop26, “and not at some distant point in the future, but for this decade”. In a joint op-ed on Wednesday, the two underscored the need for private-sector contributions if the world is to successfully fight climate change. “Ramping up adoption of clean energy and other sustainable infrastructure fast enough to avoid the worst impacts of climate change will require trillions of dollars in new investment — likely in the ballpark of $100tn,” the two wrote. “Most of that will have to come from the private sector, especially after the enormous toll that the pandemic has taken on government budgets.” The trillion-dollar pledge was lauded as “historic” by Mr Sunak during his own speech at the summit, in which he also unveiled plans to turn the City of London into “the world’s first net zero aligned financial centre". However, despite the big headline number, sceptics question the underlying terms of the commitments. According to French non-profit Reclaim Finance, none of the sub-alliances that make up GFANZ require signatories to stop financing fossil-fuel expansion. And since the 2015 Paris accord was struck, global banks have funnelled $4tn into oil, gas and coal, with almost half a trillion of that allocated this year alone, according to Bloomberg data. While Mr Carney’s grand project — to get big finance to commit to net-zero CO2 emissions by midcentury — has delivered the money, now the challenge is to prove to the world that the finance industry can reform itself fast enough to avoid a climate catastrophe. Mr Carney said in a recent interview that he will be “ruthlessly, relentlessly” monitoring signatories to make sure they live up to their promises. GFANZ members themselves have also addressed the seriousness of the task ahead. Referring to the headline $130tn figure, Larry Fink, the chief executive of BlackRock, said at Cop26 that “deploying that capital is going to be far harder” than securing the commitments. However, the groundwork has been laid for finance to act, according to Rhian-Mari Thomas, head of the UK government-backed Green Finance Institute, set up to promote sustainable investing. “We mustn’t forget how far we’ve come: this is the `finance Cop’ because previous Cops have convinced and aligned governments with the climate science, which shows we’re in an emergency, and is incontrovertible,’’ she said. “Building on that work, as the finance industry also increasingly gets behind the net-zero agenda, we now need to convert commitments into a wall of capital to fund the transition.”