The number of financial firms committing to a zero-emissions global economy is growing exponentially.
On the eve of President Joe Biden's virtual climate change summit with approximately 40 other world leaders and the fifty-first anniversary of Earth Day, a new alliance of 160 financial institutions was formed to achieve net zero by 2050 or sooner.
The Glasgow Financial Alliance for Net Zero (GFANZ) consists of three separate groups representing different sectors of the financial universe — the Net Zero Banking Alliance (NZBA), comprising 43 banks from 23 countries including Bank of America, Citi and Morgan Stanley in the U.S.; the Net Zero Asset Managers Alliance of 87 firms, including BlackRock, Vanguard, Allianz Global Advisors, Invesco and State Street Global Advisors and Trillium Asset Management, which joined Wednesday; and the 37-member UN-Convened Net Zero Owners Alliance, which includes the David Rockefeller Fund and the California Public Employees' Retirement System (CalPERS).
Together these institutions have more than $71 trillion in assets under management and they will be joined shortly by leading insurers and reinsurers in the soon-to-be launched UN-convened Net Zero Insurance Alliance (NZIA).
Achieving net zero means reaching an overall balance between emissions produced and emissions taken out of the atmosphere by 2050 or sooner.
Mark Carney, a former governor of the Canadian and UK central banks who now serves as UN Special Envoy of Climate Action and Finance and is chairman of GFANZ, tweeted that the new alliance "is the breakthrough in mainstreaming climate finance the world needs … [and] will ensure the financial system works together to broaden, deepen & accelerate the #netzero transition."
The Purpose of the New GFANZ Alliance
GFANZ aims to establish credible net zero commitments covering all financed activities in all sectors of the financial system, expand the number of financial institutions committed to finance the transition to net zero and ensure that commitments are backed by interim targets set for 2030 or sooner along with transition plans consistent with global warming of 1.5°C above pre-industrial levels.
