LONDON (Reuters) – The collapse of Silicon Valley Bank is unlikely to have a “material” impact on the availability of capital for climate-related technologies, Mark Carney, the United Nations Special Envoy on Climate Action and Finance, said on Wednesday.
“I don’t foresee that this is material for the availability of capital for climate tech investing,” the former Bank of England Governor told a British parliamentary committee hearing when asked about the fallout from the bank’s collapse.
California-based Silicon Valley Bank, which focused on lending to technology companies, was shuttered on Friday following a bank run.
The bank’s collapse has raised concerns about technology start-ups’ access to funding. Venture capital investment in carbon and emissions-related technologies has boomed in recent years and defied a sharp drop in broader fundraising volumes.
Carney also told the House of Lords Environment and Climate Change Committee that the voluntary carbon offsets markets could play a vital role in channelling funds to developing countries to help safeguard biodiversity and support the climate fight.
He said the market was currently “tiny” at around $2 billion a year, but with improved integrity – especially around the buyers of offsets – it could grow rapidly and support countries to the tune of anywhere between $150 billion and $500 billion a year.
Carney, who is co-chair of the Glasgow Financial Alliance for Net Zero (Gfanz), the world’s largest coalition of financial firms aiming to tackle climate change, also warned against over-reliance on Britain’s expected green taxonomy.
Taxonomies set out conditions for labelling an economic activity as sustainable and aim to help investors channel capital towards green and sustainable investments.
Driving the majority of financial flows to taxonomy-aligned activities could create “perverse incentives” such as leaving transition activities heavily underinvested, Carney said.
“What is more important is what is put in place from UK’s Transition Plan Taskforce,” he said, referring to the British finance ministry’s initiative which is developing mandatory standards for listed companies and financial firms to ensure comparable transition plans.
On Wednesday finance minister Jeremy Hunt provided an update to the United Kingdom’s delayed green taxonomy and said subject to consultation, nuclear power will be classified as an environmentally sustainable activity.
(Reporting by Tommy Reggiori Wilkes and Virginia Furness; Editing by Emelia Sithole-Matarise)
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