Following the announcement of the signing of a coalition of international financial companies to fight climate change led by Mark Carney;
Robert Penman, Associate Analyst on the Theme Team at GlobalData, a leading data and analytics company, provides his perspective:
“Mark Carney’s climate finance signatories represent $130 trillion in private capital, which must now be brought into line with net zero by 2050. GlobalData’s deal database shows that while deal volume venture capital (VC) transactions related to the environment theme increased in 2020, the total value of these transactions fell. This may show how difficult it will be to unlock private funding. Venture capital fund managers must spearhead investments in environmental solutions to address the climate crisis.
“The International Financial Reporting Standards (IFRS) Foundation has also announced the formation of a new International Sustainability Standards Board (ISSB). The new council will provide disclosure standards so investors can factor climate change into every investment decision.
“The formation of the ISSB will add clarity to the complex and disjointed world of ESG disclosure, where a lack of standards leads to wide variation in ratings and a lack of trust. However, the ISSB disclosure standards will require strong accountability measures through regular audits and transparent methodologies to be successful.