Transforming Climate Finance: The Impact of the Paris Agreement on Banking and Finance Sector
- Karya Oktem
- 31 Tem 2024
- 2 dakikada okunur
The Paris Agreement, adopted in 2015, is a milestone in global efforts to combat climate change. The agreement aims to curb greenhouse gas emissions and limit global temperature rise to below 2 degrees Celsius. Signed by all countries, it assigns each nation the responsibility to set and implement its own greenhouse gas reduction commitments. It is based on the principle of common but differentiated responsibilities among developed and developing countries. Implementation of the Paris Agreement requires each country to update its nationally determined contributions and develop action plans to achieve sustainability goals.
The Paris Agreement, adopted in 2015, is a milestone in global efforts to combat climate change. The agreement aims to curb greenhouse gas emissions and limit global temperature rise to below 2 degrees Celsius. Signed by all countries, it assigns each nation the responsibility to set and implement its own greenhouse gas reduction commitments. It is based on the principle of common but differentiated responsibilities among developed and developing countries. Implementation of the Paris Agreement requires each country to update its nationally determined contributions and develop action plans to achieve sustainability goals.
Thanks to this understanding, the banking and finance sector has undergone a complete change. In other words, climate finance is at a turning point. Since the Paris Agreement was signed, the world’s 60 largest banks have provided a staggering $5.5 trillion in financing to the fossil fuel industry.
The largest contributors are based in the US, Canada, China, Japan, France, and the UK.
In just 2022 alone, $668.5 billion was allocated, with funds distributed across various sectors:
- Expansion: $150 billion
- Tar sands oil: $21 billion
- Arctic oil and gas: $2.9 billion
- Amazon oil & gas: $0.8 billion
- Offshore oil & gas: $34.2 billion
- Fracked oil & gas: $67 billion
- LNG: $22.7 billion
- Coal mining: $13.3 billion
- Coal power: $29.5 billion
These figures underscore the urgent need for financial institutions to align their investments with climate goals. Let’s advocate for sustainable finance practices! 💼🌍
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