More than 450 financial institutions across 45 countries are committing over US$130 trillion in private capital to transform the global economy to net zero over the next three decades.
The Glasgow Financial Alliance for Net Zero, which was launched in April 2021, introduced 24 major initiatives for the 2021 United Nations Climate Change Conference, or COP26, that’s currently taking place in Scotland. The initiatives are aiming to strengthen the information, tools and markets required for the global financial system to support the transformation to net zero.
In a progress report published today, GFANZ noted the commitments set out by firms across the financial industry — including pension funds, asset managers, insurers and banks — now exceed US$30 trillion, which will be used to achieve net-zero emissions by 2050 at the latest. These organizations will report their progress and financed emissions annually.
As part of the private finance priorities for COP26, 24 major finance initiatives, led by Mark Carney, co-chair of the GFANZ and a UN special envoy for climate action and finance, aim to transform the global financial architecture by mainstreaming and scaling climate-related reporting, climate risk management, climate-related investment returns and the mobilization of private finance to emerging and developing economies.
According to a press release, more than 90 of the founding institutions of GFANZ have already delivered on setting short-term targets, including 29 asset owners that have committed to reducing portfolio emissions by 25 to 30 per cent by 2025, as well as 43 asset managers that have published targets for 2030 or sooner.
“The architecture of the global financial system has been transformed to deliver net zero,” said Carney in the release. “We now have the essential plumbing in place to move climate change from the fringes to the forefront of finance so that every financial decision takes climate change into account. Only this mainstream focus can finance the estimated $100 trillion of investment needed over the next three decades for a clean energy future.
“The rapid and large-scale increase in capital commitment to net zero, through GFANZ, makes the transition to a 1.5°C world possible. To seize this opportunity, companies must deliver robust transition plans and governments set predictable and credible policies. This will give finance the confidence to invest, pulling forward climate actions and smoothing the transition to net zero, driving growth and jobs upwards and forcing emissions downwards. Let’s work together to seize this opportunity.”