Banks and asset managers representing 40% of the world’s financial assets have now pledged to meet the goals set out in the Paris climate agreement, as an alliance championed by former central banker Mark Carney swells under the gaze of a world increasingly alarmed by planetary warming.
More than 450 firms representing $130 trillion of assets now belong to the Glasgow Financial Alliance for Net Zero, almost double the roughly $70 trillion at the time of its April launch, according to a progress report published by the coalition Wednesday. Signatories must commit to use science-based guidelines to reach net zero carbon emissions by mid-century, and to provide 2030 interim goals.
For Carney, who chairs GFANZ, the announcement marks a milestone moment after he managed to get some of the world’s biggest financial firms to sign up at the eleventh hour. U.K. Chancellor Rishi Sunak called the commitments “historic” in a separate statement. He also used the opportunity to announce plans to make Britain, which is hosting the COP26 climate summit, “the world’s first net zero aligned financial center.”
Despite the huge headline number, skeptics question the underlying terms of the commitments. According to French nonprofit Reclaim Finance, none of the sub-alliances that make up GFANZ require signatories to stop financing fossil-fuel expansion. And since the 2015 Paris accord was struck, global banks have funneled $4 trillion into oil, gas and coal, with almost half a trillion of that allocated this year alone, according to Bloomberg data.
[Tom Metcalf and Alex Morales]