GFANZ launches critical resources for financial institutions to convert net-zero ambitions to action
GFANZ unveils new pan-sector framework for financial institution transition planning supports actionable strategies and unprecedented accountability on net-zero commitments.
The Glasgow Financial Alliance for Net Zero (GFANZ), the world’s largest coalition of financial institutions working to support the transition to net-zero greenhouse gas (GHG) emissions by 2050, has released a new pan-sector framework for financial institution transition planning supports actionable strategies and unprecedented accountability on net-zero commitments.
The report released today details progress in 2022 as well as the work that public and private stakeholders must continue to create the right conditions to crowd in private finance.
While finance plays an essential role, it cannot substitute for government policy, and certain responsibilities cannot be shifted to the financial sector. GFANZ’s Call to Action – One Year On outlines the policy levers G20 governments need to deliver on their climate commitments, including economy-wide transition plans, underpinned by sectoral pathways and policies. GFANZ also calls on the G20 to upgrade the international financial architecture. G20 standard setters should accelerate work to build frameworks for transition finance, drawing on market-based approaches including GFANZ’s Net-Zero Transition Planning framework, and ensure finance can flow to support real economy transition and thus reduce economic and financial sector risks.
Mark Carney, Co-Chair, GFANZ and UN Special Envoy on Climate Action and Finance, said, “One year after COP26, GFANZ members are following through on their high-ambition net-zero commitments by creating a holistic framework for net zero transition strategies, setting interim targets, taking action to support real world decarbonization, and improving accountability. That accountability extends to governments and international financial institutions who—based on the real-world experience of GFANZ members—must now deepen their efforts to address climate change. The finance is there if the world truly wants to meet its climate goals. With today’s transition planning framework, we can accelerate the speed and scope with which these enormous financial resources are put to work to achieve the world’s goals.”
The GFANZ Call to Action also stresses the need for reforms to support the managed phaseout of high-emitting assets; to ensure that carbon markets can play a meaningful role this decade under a high-ambition path; and to address longstanding barriers to the flow of climate finance to EMDEs.
The GFANZ recommendations and guidance for financial institutions are voluntary and complementary to related efforts by the seven sector-specific net-zero alliances. By helping to fill the current absence of a holistic policy approach to transition planning, GFANZ hopes that its work will assist policymakers, regulators, and standard-setters as they produce rules and guidance around net-zero transition plans, and align financial architecture to enable delivery of net-zero across the globe.
Michael R. Bloomberg, Co-Chair, GFANZ and UN Special Envoy for Climate Ambition and Solutions, said, “The financial firms that have signed on to this coalition have all committed to achieving a goal that – without a blueprint or roadmap – will be very difficult to reach. These resources will give firms the guidance and direction they need to turn their commitments into action, speed up global progress on climate change, and reach their destination.”
Mary Schapiro, Vice Chair, GFANZ, said, “To achieve a net-zero global economy, we need the financial sector to honor their net-zero commitments and rapidly scale transition finance. With the GFANZ Net-zero Transition Plan framework and supporting resources, financial institutions now have common tools to operationalize their net-zero commitments and track progress, driving transparency, accountability, and concrete action to support the net-zero transition.”