Code Red – From the IPCC alert to the COP26 response

Insights on sustainable finance from the UN clarion call through to the world leaders meeting in Glasgow


2021 has been an important year for climate change awareness. With a COP being held in November, world governments made a series of announcements to demonstrate about their commitment to reach the ambitions set out in the Paris COP, held in 2015. The EU, in particular, began a process of putting policies in place of pledges through its Green Deal initiative.

Mid-year saw the Intergovernmental Panel on Climate Change (IPCC) publish its most damning report to date, where it officially put the world on a ‘Code Red’ footing concerning both – the time remaining and the actions needed to avoid a catastrophic outcome. In short, to limit the global temperature rise to 1.5 degrees above 1990 levels by 2100, the world must be at net zero by 2050. That target requires almost all remedial policies in place by 2030.

Private finance is necessary to make up for yawning shortfalls between government commitments and investments. This leaves bankers interpreting environmental policy, scientific pathways, UN responsible banking guidelines, circular economy reports, and what amounts to an entirely new risk category. Failure to properly plan for the 2020s’ green economic overhaul could leave banks with serious credit and liquidity issues.

The GreenPoint ‘Code Red’ series was written to explore and explain issues faced by the banking sector regarding climate change. Its focus was also to provide a blueprint for creating strategies that allow banks to become agents of change, working with their customers to create a controlled transition to a greener and more prosperous future.

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