Thought Piece

Harnessing the power of London for global climate action: Reflections on London Climate Action Week 2024

Posted: 10 Jul 2024

Resource Type: Thought Piece

London Climate Action Week (LCAW) has scaled up significantly since its launch in 2019. The annual event is now more than a key milestone in the UK sustainability calendar; it’s a global moment that sees leaders, organisations and communities from across the world descend on London to drive climate action.

Having attended LCAW for a number of years, it was exciting to witness this growth in person at this year’s event and to see the many impactful engagements and breadth of conversation now taking place across the week. Below are some highlights from myself and the City of London sustainable finance team.

Financing the global climate transition

Conversations across the week explored how to develop a robust climate strategy to mobilise finance in the run-up to COP29 and beyond. A highlight was the IEA-COP29 High Level Energy-Transition Dialogue, the second in a series of dialogues taking place ahead of COP29 in November. The London discussion was focused on financing the energy transition, specifically on how we can scale up the clean energy investment needed to deliver global net zero emissions in the energy sector, including for emerging markets and developing economies, (which, despite being home to two-thirds of the world’s population, currently only receive 15% of clean energy investment). Attendees on the day included COP29 President-Designate Mukhtar Babayev and IEA Executive Director Dr Fatih Birol, alongside ministers and climate envoys from many countries. 

More broadly, transition finance was a key focus across events at LCAW, including from the perspective of sustainable infrastructure. At the UK-Saudi Sustainable Infrastructure Summit, policymakers, industry leaders and financial professionals from the UK and Saudi Arabia gathered to discuss the mobilisation of UK-based capital and innovation into Saudi's Vision 2030 infrastructure development. Bridging the substantial investment gap in sustainable infrastructure — projected to grow to $15 trillion globally by 2040— will require a collaborative approach involving (re)insurance, capital markets and innovative financial solutions to mobilise international private sector investment. Discussions therefore highlighted the importance of de-risking capital for emerging technologies, such as vertical farming and hydrogen energy, to achieve net zero targets.

Strengthening global sustainability standards

LCAW started with an exciting step forward in sustainability reporting — an enduring and much-discussed challenge. The International Sustainability Standards Board announced that the IFRS Foundation is taking over responsibility for transition plan disclosure resources developed by the Transition Plan Taskforce, a body announced at COP26 in Glasgow in 2022. This announcement is a big win for harmonising sustainability disclosures and the development of high-quality transition plans worldwide. It is also fantastic to see a UK initiative setting a global baseline in this way and we hope this development will help to speed up the effective flow of climate capital based on the establishment of accurate, reliable and comparable global reporting standards.

Supporting a just transition and strengthening community adaptation and resilience

It was great to see wider recognition that a just transition to a net zero economy requires a fair and even distribution of costs and benefits to global communities, considering the people at the heart of the change. This sentiment was echoed across a range of events, including the City of London Corporation’s  workshop on the role of Venture Capital and Private Equity firms in a just transition in emerging and developing economies. In a similar vein, I was pleased to see more focus on adaptation and resilience across LCAW events this year, further recognising the need for our infrastructure, cities and people to adapt to the changing climate and for significant climate action to be taken at the local level. Discussion also focused on countries’ nationally determined contributions (set to be updated in 2025) and how to build nature and resilience goals into these.

Enabling a nature positive and net zero economy

Given that the World Economic Forum estimates that by 2030 nature loss could see global GDP reductions of £2.1 trillion each year, it was encouraging to see — and support — a growing focus on the natural world at LCAW. The Corporation was delighted to co-host a panel discussion and reception with the World Economic Forum on how nature action can be an impact multiplier in bending the emissions curve, halting and reversing biodiversity loss, whilst also ensuring economic prosperity. Discussion focused on the role of collaboration in avoiding “paper decarbonisation”, as well as the need to unlock more genuinely catalytic capital in this space. Speakers highlighted the encouraging number of impact investment funds in development that address both nature and climate in tandem. Ultimately, however, a system-wide change is needed, and therefore it will be critical to speak not only about nature-based investing, but also the nature of investing.

Watch now

Net Zero Delivery Summit 2024
Panel discussion: Securing a nature positive future

Net Zero Delivery Summit 2024
Panel discussion: Securing a nature positive future

Download now

From commitment to action: Tracking UK financial services’ progress on the pathway to net zero

From commitment to action: Tracking UK financial services’ progress on the pathway to net zero

Scaling carbon markets

All sources of funding are needed for climate action. Carbon markets channel finance towards critical climate projects and provide debt-free finance to middle and low-income countries. As home to a carbon markets startup sector, the UK has the potential to play a leading role in the growth of the market. This potential was reflected at LCAW as, in a step change from previous years, several events across the week focused on the role of carbon markets in reaching net zero.

One key event was a dialogue hosted by the London Stock Exchange (LSEG), with the UK Carbon Markets Forum and the ASEAN Alliance on Carbon Markets (AACM). The event saw the launch of a report delivered by Oliver Wyman, the City of London Corporation and the UK Carbon Markets Forum: “Unlocking the Potential of Carbon Dioxide Removal”. The report digs into the sources and uses of the $32BN of capital that has flowed into the space as interest has grown. It also highlights the urgent need to broaden and scale the corporate demand base. It is estimated that 3-5x more investment is needed to make the projects in development commercially viable, and 25 times more is needed by 2030-35 to meet climate goals.

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Accelerating Carbon Dioxide Removal: Unlocking the UK's potential to support global net zero

Accelerating Carbon Dioxide Removal: Unlocking the UK's potential to support global net zero

Collaborative action to drive change

A flagship moment for the week was the Climate Innovation Forum. In his keynote address, John Podesta, Senior Advisor to President Biden for International Climate Policy, pointed to the importance of public-private partnerships to unleash the capital needed to invest in the green technologies of the future. The Innovation Forum also saw the launch of the Climate Action Coalition. The Coalition will bring together a cross-sectoral group of international actors, businesses, NGOs and investors to address challenges around the implementation of net zero solutions, build networks and share expertise. John Kerry, launching the Coalition alongside Chris Skidmore, highlighted the importance of choosing to do better in his stirring speech, saying “The challenge is not capacity; it is willpower.”

Overall, discussions across LCAW showed significant momentum for both the UK as a climate leader on a global stage and for the wider climate space. This was something which we reflected on earlier in the year when we released the second iteration of From commitment to action, a report focused on the progress of our leading sustainable finance centre in mobilising private capital to support the delivery of net zero. It showed, for example, that UK financial institutions covered by the data set tripled their investment in project-level green finance in just one year, to USD 2.3bn. Events across the week also looked forward to other key international climate moments later in the 2024 calendar, including New York Climate Week and COP29, as well as reflecting on conversations from events earlier in the year, such as our  Net Zero Delivery Summit

In a time of political change in the UK, I’m keenly looking forward to how the initiatives, discussions and connections established during LCAW will supercharge action in the private and public sectors over the months to come, underpinned by our Climate Action Strategy to create green jobs, drive sustainable growth and tackle the climate crisis.

Irem Yerdelen

Councillor Irem Yerdelen

Lead Member for Sustainable Finance at the City of London Corporation

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