The UN Climate Change Conference (COP26)opens in Glasgow on October 31 and runs until November 12. Mitigating climate change is a subject which will continue to affect everyone as we work towards achieving net-zero greenhouse gas emissions by 2050.

Banking group HSBC has reduced its carbon footprint in the Isle of Man and Channel Islands by 46% over the past five years.

Aline Ayotte, head of commercial banking for HSBC in the islands, writing this piece for Working Week, says she believes the finance industry has a key role to play in addressing climate change, but collaboration is key.

The COP26 climate conference in Glasgow is acknowledged as presenting a major opportunity for the world to get itself on track to achieve the global target of net-zero emissions by 2050 and to limit temperature rises in line with the Paris Agreement.

With last year’s conference postponed because of the pandemic, there is added pressure on the Glasgow conference to settle the outstanding issues - but the challenges are huge.

A successful COP26 will result in an acceleration of climate policies - unlocking incentives for investment to reduce emissions and build resilience.

But failure will increase uncertainty over the prospects for avoiding the severest impacts of climate change and the climate response becoming ever costlier to address.

Obligation and Capacity

Our financial services industry has both an obligation and the capacity to play a role in supporting the journey to those global goals - in our view, in a few areas.

First, it’s vital that we help customers make the transition to net zero. This is the most significant transformation the global economy has faced since the industrial revolution, and we need to bring customers with us on the journey by making sustainable finance solutions more accessible and inclusive.

For instance, we have an opportunity to help companies to access sustainable finance and expertise, so that they can reduce their carbon emissions to net zero.

It’s why, as a bank, we’re providing between USD750 billion and USD1 trillion of financing and investment globally by 2030 to help clients transition to lower carbon operations.

Providing inclusive solutions also means listening carefully to customers, so that as an industry we can develop products that can empower customers to make sustainably focused choices - such as ESG investments, or green loans to enable customers to purchase sustainably focused items such as solar panels or electric vehicles.

Second, as an increasingly digital industry - and a jurisdiction with a digital focus - we need to support the scaling up of new technologies.

Around half the technologies needed to meet the climate challenge aren’t yet commercially deployable and need to be rapidly scaled up.

As an island business community, we need to ask ourselves what role we can play in supporting that digital evolution.

In addition, we can continue to enhance our own digital platforms to help customers cut down on their carbon footprint - by making it easier to talk to us remotely, viewing statements or investments online, or submitting documentation digitally.

And third, as a globally-dynamic international finance centre, we have the networks and experience to build global partnerships and create common standards.

That sort of global connectivity will be key - climate change can only be tackled in collaboration between public and private sectors and will require an ability to tap into exactly the sorts of networks Isle of Man firms have built up.

Those firms with global scale and footprint in emerging markets can also be uniquely placed to deliver finance where it is most needed.

The £400m Sustainable Bond recently announced by the IoM Treasury is a case in point - an innovative approach, for which HSBC structured the Sustainable Finance Framework and, alongside other banks, acted as joint active bookrunners.

It’s an excellent example of how the financial sector can work together with governments and lead the way in helping to build a more sustainable future for all.

This is a journey of intent: as COP26 will no doubt highlight, becoming sustainably focused is a bold and ambitious journey. In isolation, we don’t have all the answers when it comes to sustainability.

But as a business community in the island, if we listen to our customers and to each other, together we can preserve and protect our planet and beautiful island for future generations.