More countries are stepping up climate ambition by announcing net-zero emissions targets. The UK was the first country to legislate for net-zero emissions in 2019. Recently, the Climate Change Committee, the independent body advising the UK government on emissions planning, set out the sixth carbon budget to recommend the reductions required to get to a net-zero emissions position by 2050. This would equate to limiting temperature rises to 1.5°C, the more challenging goal set out in the Paris Agreement.

More countries are stepping up climate ambition by announcing net-zero emissions targets. The UK was the first country to legislate for net-zero emissions in 2019. Recently, the Climate Change Committee, the independent body advising the UK government on emissions planning, set out the sixth carbon budget to recommend the reductions required to get to a net-zero emissions position by 2050. This would equate to limiting temperature rises to 1.5°C, the more challenging goal set out in the Paris Agreement.

The AGF report identifies five principles to make net-zero a reality.

  1. Recognise that the financial requirements for net-zero can be met with good policies and practices;
  2. Shift the mind set from managing climate risks to aligning finance with net-zero as well;
  3. Make real economy policies investable to attract capital;
  4. Design financial policy and regulations with net-zero in mind;
  5. Successful net-zero financing in the UK will depend on shaping and developing effective international frameworks.

The report identifies 15 recommendations to support these principles. Much work is already underway across the financial community to implement green and sustainability linked products that provide transparency that low-carbon transition is happening. These principles help mobilise finance.

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