04 Nov 2021
Posted in Thematic Research
VC data shows challenge of unlocking private finance for climate change solutions, says GlobalData
Following the news that a coalition of international financial companies have signed up to tackle climate change led by Mark Carney;
Robert Penman, Associate Analyst in the Thematic Team at GlobalData, a leading data and analytics company, offers his view:
“Mark Carney’s climate finance signatories represent $130 trillion of private capital, which must now be net-zero aligned by 2050. GlobalData’s deals database shows that, although the volume of venture capital (VC) deals tagged to the environment theme rose in 2020, the total value of such deals fell. This may demonstrate how difficult it will be to unlock private finance. VC fund managers must spearhead investment in environmental solutions to tackle the climate crisis.
“The International Financial Reporting Standards (IFRS) Foundation has also announced the formation of a new International Sustainability Standards Board (ISSB). The new board will provide disclosure standards so investors can take climate change into account in every investment decision.
“The formation of the ISSB will add some clarity to the complex and disjointed world of ESG disclosure, where a lack of standards leads to wide variation in ratings and a lack of trust. However, ISSB’s disclosure standards will need firm accountability measures through regular audits and transparent methodologies in order to be a success.”