In a recent report, leading international law firm Allen & Overy LLP tackles the question of the financing gap in achieving net zero emissions, aligned with the United Nations Framework Convention on Climate Change (UNFCCC) Standing Committee on Finance’s standards. The report takes a methodical approach to defining and understanding climate finance, which aims at reducing emissions and enhancing the sinks of greenhouse gases (GHGs). The goal is to reduce the vulnerability of human and ecological systems to negative climate change impacts.
To lay the groundwork, the report sets out that the extent of climate finance is limited to primary capital flows. This provides a boundary and focus on the direct investments into initiatives and developments that seek to mitigate the negative impacts of climate change, demonstrating how far we are from filling the financing gap.
Such climate finance mapping is an integral part of understanding our progress towards global climate goals, and thus provides invaluable insights for legal practitioners working in corporate law, as well as those in the environmental sector. Allen & Overy LLP’s report underlines the scale of the challenge, offering a critical review of the methods used to finance climate change initiatives to achieve net zero emissions.
To read the full published report on Allen & Overy LLP’s findings and to delve deeper into the sobering realities of the new zero financing gap, click here.