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Glasgow Financial Alliance for Net Zero says all is well within its organization (2022)
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After reports that it is falling apart under pressure being placed on large Wall Street banks, the Glasgow Financial Alliance for Net Zero (GFANZ) told Bloomberg News on October 8, that all is well and on track for a successful COP27 next month. According to Bloomberg:[1]
“In a statement to Bloomberg News on Saturday, a spokesperson for the Glasgow Financial Alliance for Net Zero said the group has 'received no indication from any of our members that they intend to leave.'
"GFANZ, which brings together over 500 finance firms managing more than $135 trillion of assets, has faced possible defections from firms including JPMorgan Chase & Co., Morgan Stanley and Bank of America Corp., according to people familiar with the process. The heavyweights were unhappy with the potential addition of binding restrictions on fossil finance, the people said.
"Tensions soared after a United Nations-backed group, Race to Zero, earlier this year proposed such terms as a necessary condition for net-zero claims to be credible. That language was subsequently softened, and in its statement on Saturday, GFANZ said each sub-alliance of the group is 'subject only to their own governance structures,' essentially giving them the freedom to ignore such proposals.
"Mark Carney, GFANZ co-chair, has already publicly admonished Race to Zero for going 'too far.' Jakob Thomae, an advisory board member of GFANZ, says he expects parts of GFANZ will eventually sever ties with Race to Zero and seek a more tailored decarbonization methodology to appease members.
"But there are already concerns being raised in some corners that the ostensible sidelining of science represents a worrying development. Al Gore, the former US vice president turned climate activist, last month warned that investors are growing increasingly impatient with evidence of potential 'greenwashing' amid signs that net-zero pledges made by some members of the financial industry aren’t credible….
"Saturday’s statement merely reflects what had been the existing governance structure, GFANZ said, adding that many of its sub-alliances are UN-convened. But the need to reassure members of their independence was made clear in recent weeks by brewing tensions, with banks behind the scenes seeking urgent clarification, according to people familiar with the process.
"Allowing the sub-alliances, whose boards are heavily represented by the finance industry, to set their own terms is a dangerous move, according to climate nonprofits.
"One banker close to the situation said putting out a such a statement should be viewed as a necessary concession to Wall Street to keep the banks onside.
"Lucie Pinson, executive director at environmental nonprofit Reclaim Finance in Paris, said efforts to soften the terms of GFANZ membership have the potential to 'kill' the net-zero alliance.
"'Even before the revelations that some banks may leave GFANZ in opposition to real climate action, there were plenty of doubts that the alliance could really deliver on net zero,' she said before Saturday’s statement was released. 'The outcome of this issue will tell us decisively whether we should expect banks to lead the climate fight or act simply as agents of greenwashing.'”
See also
- Environmental, social, and corporate governance (ESG)
- Economy and Society: Ballotpedia's ESG newsletter
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