Steve Waygood, chief responsible investment officer at Aviva Investors, has called for the creation of an international panel on climate finance at the upcoming United Nations climate change summit (COP26) to improve negotiators’ understanding of the capital markets and the real economy.

Opening a Principles for Responsible Investment forum in London last week, Waygood said negotiators were currently “blindsided on capital markets and have no real understanding of how the real economy is working”.

He hinted that the idea was to create a climate finance version of the Intergovernmental Panel on Climate Change (IPCC), saying the latter had done much over the last few decades “to make sure that science at least is better understood”.

“We need to create at COP26 an international panel on climate finance that makes sure that negotiators at every COP thereafter understand the huge delta that exists between the existing market environment and the vision of the Paris Agreement,” he said.

He mentioned the names of others that had helped shape the idea of the need to create such a panel at the UN climate change conference in Glasgow later this year.

Earlier Waygood had said that although demand for ESG had shot up “it’s nowhere near enough”, and that currently the capital markets were “not structured for sustainability”.

“I think the world’s biggest market failure is that markets as they remain structured will not deliver the Paris Agreement,” he said.

Waygood is also an influential figure in responsible investment. In addition to his position at Aviva he is, among other roles, a member of the Financial Stability Board Taskforce on Climate Related Financial Disclosure and chairs the Corporate Human Rights Benchmark and the World Benchmarking Alliance.

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