While the COVID-19 pandemic is our shared, global fight right now, we can’t lose sight of the planet’s existential fight – the climate crisis. Nor can we lose the important momentum we’ve gained by taking major steps to address it.

One of the most promising developments from the UN Secretary-General’s Climate Action Summit last September, and in the climate movement more broadly over the past few months, has been the way that the private sector – and the investor community in particular – is taking critical steps to meet the climate challenge.

The UN Foundation has been working on this for as long as we’ve been around. For the past 18 years, we’ve co-hosted a biennial Investor Summit on Climate Risk in partnership with the private sector-focused non-profit Ceres and the UN Office for Partnerships. Every other year, the Investor Summit brings together several hundred global investors with trillions of dollars of assets under management to consider and act on the necessity and opportunity of shifting investment portfolios away from fossil fuels and other climate change-causing activities and toward a clean, sustainable global economy.

Moving to Digital Amid COVID-19

While we were unfortunately not able to hold an in-person Investor Summit this year on March 24, we were pleased to kick-off a virtual series on that day featuring new UN Special Envoy, Mark Carney, with more than 300 investors and experts from the around the world.

Having just stepped down after seven years as Governor of the Bank of England and, having previously served as head of Canada’s central bank, Mark Carney has now taken on two new, profoundly important roles: the UN Secretary-General’s Special Envoy for Climate Action and Finance, and for this year, the UK Prime Minister’s Advisor on Finance for COP26, the next UN climate conference postponed until 2021.

These positions dovetail in a shared commitment to mobilizing the ambitious action needed across the global financial system to achieve the goals of the Paris Agreement. That includes building the frameworks necessary to bring the impacts and opportunities of climate change to the world of private financial decision-making and supporting the overall, global transition to a net zero economy, a key goal of COP26.

These new roles will also give Mark Carney the opportunity to build on and merge the great work he has been doing on climate change in the finance community with the many commitments and initiatives that were announced last September during the Secretary-General’s Climate Action Summit and carry them forward to the climate COP in Glasgow later this year. Those efforts include ambitious commitments by a number of investors to ‘align’ their portfolios with net zero emissions trajectories through initiatives like the Net Zero Asset Owner Alliance. Its current membership already represents more than $4 trillion in assets.

But despite this impressive leadership, there’s still a long way to go on the road toward fundamentally transforming the global economy so that it safeguards our climate. Take energy, for example – a sector that is responsible for two thirds of global greenhouse gas emissions. According to estimates from the Intergovernmental Panel on Climate Change (IPCC), to reach our climate goals, we need an annual investment of $2.4 trillion in the energy sector alone until 2035. For reference, global investment in renewable energy power generation – wind and solar – was $288 billion in 2018. So, we need to increase our low-carbon investments by an order of magnitude to achieve the transformation.

Preparing for Climate Shocks

During his virtual talk, which focused on mobilizing finance to support the transition to a net zero emissions economy, Mark Carney reaffirmed the importance of protecting the financial system from climate-related shocks, underlining that, like COVID-19, we must face down the climate threat together because societies and economies all over the world are interconnected. The difference is that while intense efforts are underway right now to ensure that COVID-19 is, as Carney put it “an enormous but ultimately temporary shock,” climate shocks will not all hit at once: they will continue to occur over time and with increasing intensity – destabilizing global markets, people’s health and wellbeing, and ecosystems – if urgent and meaningful action isn’t taken.

That’s why Carney said that the financial community needs to continue “to develop the necessary frameworks to finance a smooth transition to a net-zero economy” and to prioritize what he called the “three Rs” – reporting, risk management, and returns. “If we can come together to meet one of the biggest challenges in medical biology, so too can we come together to meet the biggest challenge in climate physics,” he said.

The session also featured two investor representatives, California State Controller Betty Yee, who, in addition to acting as the state’s chief financial officer, is on the board of the U.S.’ two largest public pension funds, California Public Employees’ Retirement System (CalPERS) and the California State Teachers’ Retirement System (CalSTRS), and Peter Damgaard Jensen, the chair of the European Institutional Investors Group on Climate Change (IIGCC) and the former CEO of the Danish pension fund PKA.

The bottom line from all of their remarks: This moment is teaching us that we must be better prepared for the next global crisis. The science is telling us – and has been telling us – that climate change is a global crisis that’s unfolding now and will only grow worse if we don’t act speedily. The private sector has a crucial role to play in making us more resilient to climate shocks and in drastically cutting global greenhouse gas emissions, to reach net-zero as soon as possible.

Over the coming weeks and months, we will be organizing additional virtual sessions of the Investor Summit on Climate Risk to advance other key outcomes from the Secretary-General’s Climate Action Summit. You can find more information about them here.