Other Group

Glasgow Financial Alliance for Net Zero

Website:

https://www.gfanzero.com/

Formation:

2021

Chairman:

Mark Carney

Type:

Climate change investor activism

Glasgow Financial Alliance for Net Zero (GFANZ) is an environmental, social, governance (ESG) investment initiative to combat climate change which represents organizations with assets totaling $130 trillion. GFANZ’s goal is to achieve net-zero global greenhouse gas emissions to reduce the average global temperature by 1.5 degrees Celsius by 2050. [1]

GFANZ started as Race to Zero, a United Nations project to rally financial institutes to commit to net zero global emissions. Former Bank of England governor Mark Carney led Race to Zero and is the chairman of GFANZ. At the U.N.’s 2021 Climate Change Conference, Carney announced that the GFANZ had enough assets under its control to meet its goal of eventual net zero emissions. [2]

History

Glasgow Financial Alliance for Net Zero was born out of Race to Zero, a United Nations project launched in June 2020 to gain commitments from financial firms to support eventual net zero carbon emissions prior to the United Kingdom hosting the U.N.’s 2021 Climate Change Conference (also known as COP26) in November. [3] By April 2021, Race to Zero had 170 firms and $70 trillion. The group was then reformed as GFANZ and has continued to grow its membership since. [4] Mark Carney led Race to Zero and remained the leader as the organization reformed. [5]

Structure

As of December 2021, Glasgow Financial Alliance for Net Zero consists of 450 financial firms across 45 countries with total assets of $130 trillion. [6] Each member is part of one of the following subgroups: the Net-Zero Banking Alliance, the Net Zero Asset Managers initiative, the Net-Zero Asset Owner Alliance, the Paris Aligned Investment Initiative, the Net-Zero Insurance Alliance, the Net Zero Financial Service Providers Alliance, or the Net Zero Investment Consultants Initiative. [7]

Leadership

GFANZ was founded by longtime central bank official Mark Carney, the former governor of the Bank of Canada and the Bank of England. Carney has also worked as the United Nations special envoy for climate action and finance, as United Kingdom Prime Minister Boris Johnson’s finance adviser for COP26, and with the COP26 Private Finance Hub in partnership with the UNFCCC Climate Action Champions, the Race to Zero campaign and the COP26 Presidency. [8]

Carney has said: “We cannot get to net zero through niche efforts; we must green the entire financial system, along with every sector of our economies. To mobilize the capital needed, GFANZ is accelerating the best practice tools and methodologies that are essential for ensuring that the climate is at the heart of every financial decision.” [9]

In November 2021, GFANZ announced that former New York City mayor Michael Bloomberg will become co-chair with Carney, and former U.S. Securities and Exchange Commission head Mary Schapiro will become vice-chair. Both Bloomberg and Schapiro are on the U.N.’s task force on climate-related proposals, which Carney leads. [10]

Criticism

John Howell of GreenBiz has questioned the organization and strategy of the Glasgow Financial Alliance for Net Zero. According to Howell, GFANZ and the United Nations lack a clear definition of global “net zero” greenhouse gas emissions, noting that U.N. Secretary-General Antonio Guterres has said, “there is a deficit of credibility and a surplus of confusion over emissions reductions and net zero targets.” Howell is also concerned about the credibility of GreenBiz since many of its members have been long invested and profited off of fossil fuel companies. [11]

Reclaim Finance has criticized GFANZ for being insufficiently strict in its guidelines for members to pressure companies to reduce greenhouse gas emissions. Most notably, GFANZ does not currently require members to divest from fossil fuel companies. [12]

Chris Hohn of the Children’s Investment Fund Foundation accused GFANZ of “greenwashing,” or giving an environmental public relations boost to investment funds without any genuine commitment to environmental values. Hohn has stated that only government regulation can effectively combat climate change, as opposed to GFANZ’s private initiative. [13]

Ben Caldecott has criticized GFANZ chairman Mark Carney for using the initiative’s asset base to mislead the public. Carney has touted the group’s $130 trillion as a basis to combat climate change, but Caldecott has pointed out that most of these assets are fixed and cannot be easily transitioned to fighting climate change. [14]

References

  1. “Membership.” Glasgow Financial Alliance for Net Zero. Accessed December 7, 2021. https://www.gfanzero.com/membership/. ^
  2. Walker, Own; Hodgson, Camilla. “’Greenwashing’: Do the maths on Mark Carney’s US$130-trillion net zero pledge stack up.” Financial Post. November 9, 2021. Accessed December 7, 2021. https://financialpost.com/commodities/energy/greenwashing-do-the-maths-on-mark-carneys-us130-trillion-net-zero-pledge-stack-up. ^
  3. Hitchings-Hale, James. “What is the ‘Race to Zero’? Everything to Know About the Mission to Cut Emissions.” Global Citizen. September 6, 2021. Accessed December 7, 2021. https://www.globalcitizen.org/en/content/race-to-zero-net-zero-emissions-climate/. ^
  4. [1] “Our progress and plan toward a net-zero global economy.” GFANZ. Accessed December 7, 2021. https://www.globalcitizen.org/en/content/race-to-zero-net-zero-emissions-climate/. ^
  5. “About Us.” Glasgow Financial Alliance for Net Zero. Accessed December 7, 2021. https://www.gfanzero.com/about/. ^
  6. “About Us.” Glasgow Financial Alliance for Net Zero. Accessed December 7, 2021. https://www.gfanzero.com/about/. ^
  7. “Membership.” Glasgow Financial Alliance for Net Zero. Accessed December 7, 2021. https://www.gfanzero.com/membership/. ^
  8. “About Us.” Glasgow Financial Alliance for Net Zero. Accessed December 7, 2021. https://www.gfanzero.com/about/. ^
  9. “Progress Report.” Glasgow Financial Alliance for Net Zero. Accessed December 7, 2021. https://www.gfanzero.com/progress-report/. ^
  10. Howell, John. “Mike Carney’s $130 trillion funding for net zero: Is he good for it?” GreenBiz. November 8, 2021. Accessed December 7, 2021. https://www.greenbiz.com/article/mark-carneys-130-trillion-funding-net-zero-he-good-it. ^
  11. Howell, John. “Mike Carney’s $130 trillion funding for net zero: Is he good for it?” GreenBiz. November 8, 2021. Accessed December 7, 2021. https://www.greenbiz.com/article/mark-carneys-130-trillion-funding-net-zero-he-good-it. ^
  12. “COP26: when will net-zero finance say no to fossil fuel expansion.” Reclaim Finance. Accessed December 7, 2021. https://reclaimfinance.org/site/en/2021/11/19/cop26-when-will-net-zero-finance-say-no-to-fossil-fuelexpansion/. ^
  13. Walker, Own; Hodgson, Camilla. “’Greenwashing’: Do the maths on Mark Carney’s US$130-trillion net zero pledge stack up.” Financial Post. November 9, 2021. Accessed December 7, 2021. https://financialpost.com/commodities/energy/greenwashing-do-the-maths-on-mark-carneys-us130-trillion-net-zero-pledge-stack-up. ^
  14. Walker, Own; Hodgson, Camilla. “’Greenwashing’: Do the maths on Mark Carney’s US$130-trillion net zero pledge stack up.” Financial Post. November 9, 2021. Accessed December 7, 2021. https://financialpost.com/commodities/energy/greenwashing-do-the-maths-on-mark-carneys-us130-trillion-net-zero-pledge-stack-up. ^
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