U.S. banks are considering leaving the Glasgow Financial Alliance for Net Zero (2022)
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September 27, 2022
On September 20, 2022, the Financial Times reported that several large U.S. banks were considering leaving Glasgow Financial Alliance for Net Zero because they were increasingly uncomfortable with the legal risks they said their institutions could face because of their participation.[1]
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Wall Street banks including JPMorgan, Morgan Stanley and Bank of America have threatened to leave Mark Carney’s financial alliance to tackle climate change because they fear being sued over increasingly stringent decarbonisation commitments. In tense meetings in recent months, some of the most significant members of the Glasgow Financial Alliance for Net Zero have said they feel blindsided by tougher UN climate criteria and are worried about the legal risks of participation, according to several people involved in internal discussions. “I am close to taking us out of these global green commitments — I’m not going to allow third parties to create legal liabilities for us and our shareholders. It is immoral and irresponsible,” one senior executive at a US bank said. “What if we get it wrong, make a mistake or someone lies? Then the bank can be sued, that is an unacceptable risk.”… European banks including Santander have also expressed misgivings. The potential loss of some of the world’s biggest and most influential banks would be a serious blow for Carney’s Gfanz group, which was formed last year and took centre stage at the COP26 climate talks in Glasgow in November. More than 450 finance companies accounting for $130tn of assets have joined Gfanz, which is co-led by Carney, a Canadian and former Bank of England governor, who is currently a Brookfield Asset Management executive. The banks’ biggest concern is over strict targets on phasing out coal, oil and gas introduced over the summer by the UN’s Race to Zero campaign, a UN-led net zero standard-setting body that accredits pledges made by Carney’s alliance…. Of the 116 banks that have signed up to the Net Zero Banking Alliance (NZBA), the Gfanz banking subsidiary, none are from China or India, while Sovcombank is the only Russian lender. By comparison, Liechtenstein has three members.[2] |
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See also
- Environmental, social, and corporate governance (ESG)
- Economy and Society: Ballotpedia's ESG newsletter
External links
Footnotes
- ↑ Financial Times, "US banks threaten to leave Mark Carney’s green alliance over legal risks," September 20, 2022
- ↑ Note: This text is quoted verbatim from the original source. Any inconsistencies are attributable to the original source.
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