Members of the Glasgow Financial Alliance on Net Zero (GFANZ) are being asked to meet a more stringent set of criteria to be accredited and slash emissions 50% by 2030 as part of the United Nations’ Race to Zero initiative.
Earlier this year, Race to Zero set up seven working groups made up of independent individuals to suggest amendments and additions to its set of criteria.
These seven groups have now published their recommendations, including an update to its ‘starting line’ criteria, which are the minimum commitments that its members must make.
This now includes more detail on what is needed to achieve the reduction with particular regard to fossil fuels – something that was not previously mentioned – and a commitment to a “fair share” of the 50% cut in global CO2 emissions, which the Intergovernmental Panel on Climate Change (IPCC) says is needed by 2030 for global warming to stay under 1.5°C.
The new minimum requirements are:
- Halt deforestation and phasing down and out all unabated fossil fuels as part of a global just transition.
- Restrict the development, financing and facilitation of new fossil assets; this includes no new coal projects.
- Include in their targets all the emissions caused by their investments, lending, underwriting and insurance, including the Scope 3 emissions of the companies to which they provide these financial services.
- Targets must include land-based emissions.
- Develop transition plans to show how they will meet their commitments, including what actions they will take within the following 12 months, two-to-three years, and by 2030
- Align external policy and engagement, including membership in associations, to the goal of halving emissions by 2030.
There are more than 10,000 members of the Race to Net Zero initiative including businesses, local and regional governments and the 450 financial institutions that make up GFANZ.
It noted that some developing countries may require more flexibility as they may find it more challenging to halve emissions by 2030.
Jeanne Martin, senior campaign manager at ShareAction, commented: “We support the suggestion to add a pledge to end finance to new oil and gas and to phase out thermal coal within defined and science-based time limits as a Race to Zero Criterion.
“Up until this point, the Net-Zero Banking Alliance has lacked clear guidance for its members on fossil fuels and failed to identify sectoral policies as a key pillar in credible transition plans.
“This additional requirement could help generate the momentum needed for these banks to align their strategies with their Net Zero ambitions.”
Paddy McCully, senior analyst at Reclaim Finance, added: “These new Race to Zero criteria throw down the gauntlet to Mark Carney and Mike Bloomberg [co-chairs of GFANZ] and the GFANZ alliances and will require major improvements in what the alliances demand from their members.
“GFANZ is going to have to stop waffling on fossil fuels and will have to insist that its members stop providing financial services to the companies driving the climaticide of coal, oil and gas expansion, while massively increasing their financing of the clean energy transition.”