Canadian Mark Carney leads the Glasgow Financial Alliance for Net Zero (GFANZ). It’s a collection of over 450 financial institutions around the world, working to “accelerate the transition to a net-zero global economy”. Canadian banks were the last to join GFANZ just a few weeks before the UN COP. The fact that Canada’s fossil heavy big banks were even allowed to join tells you most of what you need to know about the bar of ambition set by Carney.
To widespread media coverage, today Carney is announcing that GFANZ now has $130 trillion dollars committed to net zero. But these huge commitments are a mile wide and an inch deep.
Many of the world’s worst fossil fuel financiers are in GFANZ. Some even started investments in new fossil fuel projects the same week they joined it. Organisations like JP Morgan Chase (the biggest fossil fuel funder in the world) and Barclays (the biggest in Europe) get to flaunt their membership of GFANZ, without taking any of the action required to genuinely reduce funding into fossil fuels. That’s because there are no mandatory commitments, or any conditions for being kicked out of GFANZ. Plus, having a 2050 target with no specific conditions means they can just keep kicking the can down the road.
Richard Brooks, Stand.earth climate finance director said:
“This announcement yet again ignores the biggest elephant in the room. There is no mention of the F words at all in this new declaration from the net zero clubs. We cannot keep under 1.5 degrees [warming] if financial institutions don’t stop funding coal, oil and gas companies.”
It gets worse. Many of the organisations joining pushed back against the most powerful plan for cutting emissions because it requires them to stop financing all new oil, gas and coal exploration projects this year.
Here are a few examples of what companies in GFANZ are up to:
BNY Mellon – At the same time as joining GFANZ, they were preparing to finance Adani Group’s Carmichael coal mine in Queensland, one of the world’s most controversial new fossil fuel projects. A project so climate risky, that it struggled to get insurers to back it.
Barclays – They said last year they would “not provide any financing to clients that generate more than 50 per cent of revenue from thermal coal activities”, including capital markets underwriting. However, 86 per cent of Monongahela Power’s generation fleet is coal-fired. And who underwrote Monongahela Power’s project? Barclays. They acted as a lead underwriter for a $216m bond deal.
HSBC – Five years ago HSBC said it would publish all details of investments in the coal mining sector. Still nothing.
Deutsche Bank – After announcing plans for imposing strict limits for loans to oil and gas companies, they’re scrapping the idea.
Each of these companies is a proud member of GFANZ.
Patrick McCully, senior analyst at Reclaim Finance said:
“The financial sector talks a big game on climate but is failing to address the urgency of the climate crisis COP26 must signal a turning point . . . away from foot-dragging and towards an end to financial support for fossil fuel expansion.”
Mark Carney needs to sharpen up the conditions for joining GFANZ, and strengthen the requirements of members. Right now, it’s a scheme that allows big finance to greenwash their reputations.
Check out Reclaim Finance’s full report here: https://reclaimfinance.org/site/en/2021/11/02/carney-net-zero-finance-alliances-failing-fossil-fuels/