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E3G comments on launch of Glasgow Financial Alliance for Net Zero

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Whitelee Wind Farm, the largest onshore wind farm in the British Isles, covering some 55 square kilometres of moorland just southwest of Glasgow
Whitelee Wind Farm, Glasgow, the largest onshore wind farm in the British Isles. Photo by ByronV2 on Flickr.

The UK COP26 Presidency is launching the Glasgow Financial Alliance for Net Zero (GFANZ) on April 21st, 2021, aiming to broaden, deepen and raise ambition in the financial sector.

E3G reacts to the arrival of GFANZ tying together the Race to Zero architecture on finance, acknowledging the imperative for enhanced government action to drive credible financial sector alignment with the Paris Agreement.

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Governments have an essential and greater role to play this decade in aligning financial systems and financial flows with the Paris Agreement.

The UK COP26 Presidency, together with the High-Level Champions for COP25 and COP26, will launch the Glasgow Financial Alliance for Net Zero (GFANZ) on April 21st, 2021, ahead of the US administration’s Climate Leaders Summit on April 22nd.

As part of the UN’s Race to Zero, GFANZ’s stated goals include:

  • GFANZ will broaden, deepen and raise ambition in the financial sector, allowing firms to demonstrate their collective commitments to supporting companies and countries to achieve the goals of the Paris agreement.
  • GFANZ will also catalyse strategic and technical coordination on steps firms need to take to align with a net zero future.

In the run-up to COP26 in November 2021, GFANZ will work to secure credible net-zero commitments by private financial institutions. Consistent with limiting warming to 1.5°C above pre-industrial levels, credible targets should include interim (pre-2030) targets for near-term decarbonisation.

E3G serves as Secretariat to the COP26 Finance Coalition Coordination Mechanism (FCCM), which helps deliver the UK’s COP26 goals by mobilising partners worldwide to obtain high-ambition commitments from financial institutions. Kate Levick, E3G Associate Director for Sustainable Finance, is a member of the Finance Sector Expert Group (FSEG) for the Race to Zero and Race to Resilience.

Quotes

The following E3G staff have offered the public comments below.

Nick Mabey, Chief Executive of E3G, and a Friend of COP26, said:

This launch marks a market tipping point, signalling that private financial markets are moving away from driving the climate crisis, and toward financing a climate-safe net-zero world. The next step will be to adopt standards to ensure all financial sector net-zero commitments are backed by credible, science-based net-zero transition plans.

Kate Levick, Associate Director for Sustainable Finance, E3G, said:

GFANZ represents a step change in ambition for a net zero financial sector. To ensure success it will be crucial that standards are robust and independent. GFANZ must take a consultative approach, integrating the best available science and the perspectives of broader stakeholders into its work.

Iskander Erzini Vernoit, Policy Advisor for Finance and COP26, E3G, said:

10 years ago, even portfolio decarbonization was novel, let alone the world’s leading financial institutions committing to deliver climate neutrality. But while the conversation has come a long way, the risk of non-Paris-aligned investing remains strong—GFANZ must improve the integrity of firm-level plans, while government policy and regulation must play their indispensable part in re-orienting capital markets in line with a safe climate.

Available for comment

The individuals above are available for commentary – please contact them directly:

Nick Mabey: nick.mabey@e3g.org

Kate Levick: kate.levick@e3g.org

Iskander Erzini Vernoit: iskander.erzini.vernoit@e3g.org

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