G20 leaders fail to agree on climate finance regulation

November 1, 2021|Written by Graham Caswell

The G20 summit has concluded without agreement on financial regulation to reduce growing climate-related risks to economic and financial stability. Although global leaders pledged to “pursue efforts” to limit global heating to 1.5°C and to promote sustainable capital flows, commitments on sustainable finance were largely confined to calls for further research and analysis.

Released on the eve of the pivotal Cop26 climate summit in Glasgow, the official communiqué from the weekend’s meeting in Rome contained many intentions and aspirations for mitigating climate change and reducing biodiversity loss, but offered few concrete details on how these goals might be achieved.

“Sustainable finance is crucial for promoting orderly and just transitions towards green and more sustainable economies and inclusive societies,” the statement reads, but the role of central banks and financial supervisors in making finance sustainable was left unaddressed. Despite many references to sustainability, there was also no agreement on a green finance taxonomy to define what this means in practice.

Movement towards global climate-related banking regulation was also absent from the communiqué, despite calls from many civil society organisations for climate-related risk buffers and capital requirements.

Reaction to the G20 summit was largely negative. “The G20 contains the world’s largest polluters so was never going to be the place to see the strongest climate leadership,” said Nick Mabey, chief executive of climate change thinktank E3G. Mabey went on to call for an agreement at Cop26 on a process to deliver the Paris Agreement target.

Oxfam International was more explicit in their criticism, calling the summit “an abysmal and total failure of leadership”.

“As the world’s largest economies and emitters, the G20 should have provided the lightning bolt that the Cop26 climate talks so desperately need,” the development organisation said in a press release today. “Instead, they responded with vague promises and platitudes.”

This page was last updated November 1, 2021

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