Mark Carney and John Kerry say big banks and other financial institutions can help transition to a low-carbon economy.
United Nations Climate Envoy Mark Carney and his U.S. counterpart John Kerry announced a new plan to bolster the financial system’s efforts to help shift the global economy to net zero greenhouse gas emissions. tight.
While many large banks, insurers, and asset managers have begun to engage in some form of action, the frameworks used may differ and some are not grounded in climate science or underpinned by intermediate goals of by 2050.
To help tackle the problem, the new group – the Glasgow Financial Alliance for Net Zero (GFANZ) – will bring together existing net zero initiatives under one umbrella to ensure that all sub-sector efforts are coherent and ambitious.
“This is the breakthrough in mainstreaming climate finance that the world needs,” Carney, the former Governor of the Bank of England, said in a statement Wednesday.
“More fundamentally, GFANZ will act as a strategic forum to ensure the financial system works together to broaden, deepen and accelerate the transition to a net zero economy.”
Launching the plan on the eve of President Joe Biden’s Head of State’s climate summit alongside Carney and Treasury Secretary Janet Yellen, Kerry – the President’s special climate envoy – said that the world’s largest financial firms recognized that the energy transition was a “big” business opportunity.
‘Speed up the transition’
“Ultimately, their commitment of capital and assets, along with adherence to high standards and ratios, will accelerate the transition to this new economy, create massive numbers of new jobs, and increase our collective ability to cope with the climate crisis. ”
Kerry’s support for the project follows a series of meetings with financial industry executives over the past few months.
So far, over 160 companies with assets of at least $ 70 trillion have signed up, 43 of which are banks – as part of the Net-Zero Banking Alliance (NZBA) – including Barclays, Morgan Stanley and HSBC and Citi.
All members will need to have their climate plans in line with the UN’s Race to Zero campaign, which ensures they are science-based, cover all types of emissions, have milestones for 2030 and commit transparent reporting and accounting.
For banks joining GFANZ, all will need to set an interim target of 2030 or earlier within 18 months that focuses on the parts of its financing activity responsible for the largest share of greenhouse gas emissions.