Financial institutions have been warned that more needs to be done in the race to net-zero carbon emissions as too few people and organisations are “walking the talk”, according to UNEP head of climate finance unit, Ivo Mulder.

Speaking at the Sustainable Investment Summit, Mulder stated: “Too few people, too few finance institutions, too few businesses and too few governments are really walking the talk,” when it comes to reducing carbon emissions.

Commenting on the propensity for companies to set climate targets for 2030, Mulder reminded them that it is only eight years away and that companies should take greater care in ensuring they hit those targets for the sake of the planet.

Furthermore, he noted that even if climate change is kept below a 1.6 degree increase, 9 per cent of farmland will still be lost to the ocean which, in the context of the projected population growth to nine billion by 2050, could lead to serious issues.

Mulder went onto continue to stress the importance of ensuring climate targets were hit, and warned that what was at stake was a liveable and sustainable future for all, emphasising that action must be taken as soon as possible.

“The financial sector will need to wake up to reality and change these stats now, not in a few years and definitely not in a few decades,” he warned.

Mulder also pointed to how extensive the solution to this problem may have to be, commenting that a fix to the climate problem may have to go beyond ESG and “there are fundamental changes needed in work and housing to find”.

Addressing potential solutions, Mulder stated that divestment would not be a particularly effective strategy due to its perceived limited scope, but emphasised other methods such as increasing engagement.

He commented: “Engagement would have to be combined with clear targets about what a fund manager would like to see from a company it has in its portfolio and outline what the consequences are of not meeting that and, ideally within the fund management industry, there should be some kind of level playing field and agreement that minimum standards are required.”

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