Top Climate Group for Financial Firms Is Shifting Its Approach
A leading climate coalition for banks is adapting after major exits by key members, aiming to broaden participation and support.
Climate Change, GFANZ, Banks, Asset Managers, Net Zero, Goldman Sachs, Wells Fargo, Vanguard, COP26, Private Finance
New York: The world’s largest climate coalition for financial firms is making some changes. This comes after several big banks and asset managers decided to leave.
The Glasgow Financial Alliance for Net Zero, or GFANZ, was set up in 2021. It’s like a big umbrella for different climate groups in finance. Now, they’re shifting how they work with these groups. A source said companies can still get help from GFANZ but won’t have to stick to the Paris climate goals.
This change follows a trend where net zero alliances have lost important members. Recently, Goldman Sachs and Wells Fargo both left the Net-Zero Banking Alliance. Last year, a group for insurers saw many members leave due to legal threats. And in 2022, a similar group for asset managers lost Vanguard, a major player in the industry.
GFANZ started over three years ago before the COP26 climate conference in Scotland. It aimed to get more financial institutions on board with net zero and to discuss the challenges of moving to a low-carbon economy.
Moving forward, GFANZ wants to include any financial institution that’s trying to help with the energy transition. They believe that without private finance, we can’t make the global energy shift happen.
Under the new setup, companies that aren’t part of a net zero group can still work with GFANZ. This might help firms in emerging markets that haven’t set 2050 net zero targets to join in.
GFANZ has gained a lot of attention, now boasting over 700 members. However, it’s also facing criticism from some US Republicans who claim these alliances act like anti-fossil fuel groups. This has led to more investigations and lawsuits against companies seen as pro-climate.
With Donald Trump set to return to the White House, climate groups might feel even more pressure. GFANZ has been crucial in financing the retirement of coal assets in Asia and has provided guidance on transition planning.
Mark Carney and Michael Bloomberg co-chair GFANZ, both influential figures in the finance world.