Greetings from Glasgow. I'm here at COP26,
joined by world leaders, climate activists,
and civil society.
The question I often get is,
"What role can the financial sector play
in driving down emissions?"
Continued push for climate disclosure-
we've made great progress in the public markets,
we need to make similar progress in the private markets.
Commitments to net zero by 2050-
40% of assets under management have made such commitments,
we need to close the gap.
But in addition to disclosure and net-zero commitments,
there are additional moves that we need
to put more energy into, starting now.
The first is engaging with management teams
to decarbonize the businesses
in which the financial sector invests.
We did a study at BCG
where we looked at eight supply chains.
Together they represent 50% of global emissions.
We found that 40% of the emissions
in those eight supply chains can be taken out
at a cost that is less than $10 per tonne of carbon.
And therefore engaging with the management teams
of these companies to drive down emissions is an imperative.
Another imperative is price on carbon.
In that same study, the next 40% can be addressed
at a cost that is between $10 and $110,
with existing technologies.
And therefore, the financial sector has an imperative
to work with policymakers to introduce a price on carbon,
to enable management teams of these businesses
to drive down that next tranche of emissions.
And that final 20% of emissions, according to our study,
requires the scaling of some of the most promising
climate technologies out there.
And therefore bringing capital to some of these ventures
that are seeking to address this final 20%,
to seeking to close the gap, is where we need
the financial sector to make a concerted focus.
In a nutshell, disclosure, net-zero commitments,
engaging with management teams, price on carbon,
and bringing capital to some of the most promising ventures
is where we need the financial sector to focus
and to continue driving.