On the eve of President Biden’s Head of State Climate Summit on Wednesday, April 21, 2021, Mark Carney (the UK Prime Minister’s Finance Advisor for COP26 and UN Special Envoy for Climate Action and Finance) – in partnership with the UNFCCC Climate Action Champions and the UN Race to Zero campaign, and the COP26 Presidency – joined John Kerry, US Special Presidential Envoy for Climate and Janet Yellen, US Treasury Secretary to launch a global alliance that brings together existing and new net zero finance initiatives into one sector-wide strategic forum: The Glasgow Financial Alliance for Net Zero (GFANZ).
GFANZ will work to mobilise the trillions of dollars necessary to build a global zero emissions economy and deliver the goals of the Paris Agreement. GFANZ will provide a forum for strategic coordination among the leadership of finance institutions from across the finance sector to accelerate the transition to a net zero economy. All initiatives in GFANZ require signatories to set science-aligned interim and long-term goals to reach net zero no later than 2050 in line with Race to Zero’s criteria. These goals are supplemented by member-determined short-term targets and action plans.
The industry-led Net-Zero Banking Alliance (NZBA), hosted by the United Nations Environment Programme Finance Initiative (UNEP FI) and co-launched by the Financial Services Taskforce (FSTF) of the Prince of Wales’ Sustainable Markets Initiative (SMI), is the newest net zero alliance. NZBA brings together an initial cohort of 43 of the world’s leading banks with a focus on delivering the banking sector’s ambition to align its climate commitments with the Paris Agreement goals with collaboration, rigour, and transparency.
The NZBA joins existing initiatives: the Net Zero Asset Managers Initiative and the UN-convened Net-Zero Asset Owner Alliance.
State Street Global Advisors, Trillium Asset Management, and Coutts are also joining the Net Zero Asset Managers Initiative today, bringing its membership to 87 members with assets under management representing over $37 trillion. The Paris Aligned Investment Initiative is joining the Race to Zero. The UN-convened Net Zero Asset Owner Alliance’s 37 members, with over $5.7 trillion assets under management, are demonstrating ambition by already setting science-aligned targets for 2025.
These alliances will shortly be joined by some of the world’s leading insurers and reinsurers in the soon-to-be launched UN-convened Net-Zero Insurance Alliance (NZIA).
By bringing together leading existing and new net zero finance initiatives in the Race to Zero together in one sector-wide strategic forum, GFANZ will catalyse strategic and technical coordination on the steps firms need to take to align with a net zero future.
UK Prime Minister, Boris Johnson, said: “Uniting the world’s banks and financial institutions behind the global transition to net zero is crucial to unlocking the finance we need to get there – from backing pioneering firms and new technologies to building resilient economies around the world. The Glasgow Financial Alliance for Net Zero will lead this charge ahead of COP26 to scale-up our ambition, accelerate our shift and help us to build back greener together.”
U.S. Special Presidential Envoy for Climate John Kerry said: “The largest financial players in the world recognize energy transition represents a vast commercial opportunity as well as a planetary imperative. As countries around the world move to decarbonize, the large sums these institutions are dedicating to climate solutions reflect a growing understanding that the transition to a low-carbon global economy will be critical for their business models. To be credible and effective as market signals, these financial commitments should adhere to clear definitions, metrics, and reporting. Ultimately, the transition to this new economy will create a massive number of new jobs and increase our collective ability to tackle climate change.”
COP26 President-Designate, Alok Sharma, said: “Without adequate finance, we simply will not achieve the change needed to safeguard our planet for future generations. As the world continues down a crucial decade of delivery on climate action, GFANZ will ensure much-needed acceleration towards net zero by uniting some of the world’s most powerful financial actors. I look forward to seeing this new alliance drive up ambition as we look to COP26 and beyond.”
Mark Carney, UN Special Envoy for Climate Action and Finance and Prime Minister Johnson’s Climate Finance Advisor for COP26, said: “This is the breakthrough in mainstreaming climate finance the world needs. I welcome the leadership of the SMI Financial Services Task Force and other global banks for their new commitments to net zero and for joining forces with GFANZ, the gold standard for net zero commitments in the financial sector. Most fundamentally, GFANZ will act as the strategic forum to ensure the financial system works together to broaden, deepen, and accelerate the transition to a net zero economy.”
Inger Andersen, Executive Director of the UN Environment Programme said: “In a critical year for climate and nature, these alliances speak to the high level of commitment and ambition that the world urgently requires from the financial sector. The end goal is a net-zero transition of the economy in line with science. Nothing less. Immediate, transparent and accountable actions underpin these commitments, and we encourage all financial institutions to follow their peers in committing to achieving the drastic reduction of emissions required over the next decade if we are to succeed in limiting global temperature rise to 1.5°C.”
Nigel Topping, High-Level Climate Champion for COP26, said: “Already, a fundamental shift in capital is accelerating, with the world’s largest asset owners and managers – and now banks – joining the Race to Zero. But the finance gap remains in the trillions of dollars, particularly for developing economies, and concerted efforts are needed to translate necessary solutions into investable propositions, which is why I am delighted to be collaborating on GFANZ.”
Brian Moynihan, Co-Chair of the SMI and Chairman and Chief Executive of Bank of America, said: “This commitment to net-zero by the SMI financial services leaders is an example of the leadership that the CEOs of SMI companies can generate by working together. We will work closely with CEOs from other industry groups and others to continue to drive the other SMI priorities established by His Royal Highness in the Terra Carta earlier this year.”
Noel Quinn, Chair of SMI Financial Sector Taskforce and Group Chief Executive of HSBC, said: “A commitment to financing the transition to net zero is essential. It’s important that the banking sector is committed to providing the financial support needed to help customers on that transition. But we have to establish a robust and transparent framework for monitoring progress against that objective and we want to set that standard for the banking industry. Industry-wide collaboration is essential in achieving that goal. I’m delighted that banks from the SMI Financial Services Taskforce have joined forces to establish the Net Zero Banking Alliance.”
Ana Botin, Group Executive Chairman, Banco Santander, said: “If we are to green the world’s economy, we need a truly global effort – banks, companies, governments, regulators and civil society working together at pace. At Santander we are proud to be part of the founding members of this new alliance, and to accelerate progress towards net zero.”