In addition, financial regulators can use monetary and regulatory policy instruments and make it mandatory for banks to disclose financed emissions, reinforcing them to reduce their exposure to the fossil fuel sector and propelling credit growth to the renewable energy sector. [...] COP29, the biggest stage for the negotiation to stave off the worst impacts of climate change, could deliver concrete recommendations on financing renewable energy and garner support from policymakers, regulators, banks, and MDBs in accelerating lending to low-carbon-emitting sectors, paving the way for the desired energy transition in the foreseeable future. [...] As renewable energy is increasingly becoming commercially viable across the world, attributed to the drop in the cost of technologies, this is an opportunity for global banks to step up their credit towards the sector. [...] With the IEA’s projection indicating an annual deficit in renewable energy investment of US$400 billion, banks can bridge this gap by limiting their exposure to the fossil fuel sector and reorienting this capital to the renewable energy sector. [...] Prioritise Lending to Renewable Energy While the renewable energy sector is part of the priority lending of banks in many developing countries, it competes with other sectors in the same bracket.
Mentioned Organizations
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- United States of America
