One of the biggest challenges of our time is, of course, climate change. We are seeing the effects of it unfold before us. My family home is in Yorkshire and this summer we saw rocks on the bed of the River Swale being revealed that I never recall seeing, even in childhood. And there are clearly more devastating effects being felt outside of Yorkshire.

It is clear to see from this year’s floods in Pakistan and droughts in East Africa, that this is a global problem that no one is immune to.

The London Stock Exchange is at the heart of the global economy and so there is no question in our minds that we must help address the global climate change challenge.

We have published our own Climate Transition Plan; setting out our strategy to reach net zero by 2040, ahead of the UK Government’s 2050 net zero target.

To fund the green economy and the transition, we were the first major exchange to launch a dedicated segment for green bonds and have since developed a broad sustainable debt offering covering primary and secondary markets. We also identify and champion listed companies and funds contributing to the global green economy with our Green Economy Mark.

However, we recognise that we can have a greater impact given our role as the world’s most international exchange. This reach means we can innovate and create the right ‘pipes and plumbing’ for the financial markets to convene business and society’s efforts to decarbonise the global economy.

Last year, at COP26 we said that we would build a Voluntary Carbon Market (VCM), not to trade carbon credits, but to direct financing into projects that are focused on climate change mitigation, that can reduce greenhouse gas emissions and remove carbon from our atmosphere.

As we look back to COP27 in Egypt, the focus was on action and tangible progress, I am therefore proud to say we are on the way to achieving our ambition. In October, we successfully launched the first public markets solution to help raise capital for the VCM and in early December, Foresight Sustainable Forestry, an investment company that invests in UK forestry and afforestation assets, became the first issuer to obtain the LSE Voluntary Carbon Market designation.

Our framework for the VCM delivers a rigorous, market-based approach for investment and allows corporates and other investors to deploy capital at scale to help directly address this global climate change challenge.

The international nature of the markets will also improve the access to capital for projects in the developing countries that frequently bear the brunt of the effects of climate change but often find it challenging to find capital.

We are ambitious in making a real impact: over £100bn has been raised through the London Stock Exchange’s Sustainable Bond Market and we have over 30 green funds listed on our markets, but there is always more to be done. We hope that the VCM will continue to facilitate businesses in achieving their net zero goals and help to address climate change which is undoubtedly one of the most pressing challenges for our generation.

Julia Hoggett is CEO of London Stock Exchange PLC

How London Stock Exchange is addressing climate change challenges: Julia Hoggett