The realities of climate change can no longer be ignored, and the financial world has a bigger role than many people think. Not only are the walls closing in – in boardrooms, in courts and in parliaments – but it’s also increasingly a matter of cold, hard numbers. These days, a phrase you hear churned out by the biggest asset managers is that climate-related risk is an investment risk.

Unlocking the trillions of climate investment required to meet corporate, national and global environmental targets will require deep and systemic changes in the financial sector. Industry groups are looked upon to show the direction of change by encouraging the adoption of standards, regulations and frameworks which conform to their interests. As early-stage players in the climate policy game, the industry body landscape is a fast moving one.

Glasgow Financial Alliance for Net Zero (GFANZ) – what is it?

Many new bodies have emerged over the past couple of years, with The Glasgow Financial Alliance for Net Zero (GFANZ) standing out as the most promising industry body. GFANZ is likely to create the most positive impact, due to its scale, global spread and backing by influential actors. Targets have been set, promises have been made, agreements have been signed. Holding these companies and countries accountable and helping them reach these targets and promises is the next step; and the GFANZ is the body necessary to engender this transition.

GFANZ was only set up in 2021 but is becoming a particularly influential industry body. The GFANZ is chaired by Mark Carney, who served as the Governor of the Bank of England until 2020. GFANZ brings together the increasingly numerous new and existing net zero finance initiatives, forming one sector-wide forum. So far over 160 firms have joined, together responsible for assets in excess of $130 trillion, with the collective aim of accelerating the transition to net zero emissions by 2050 at the latest. Carney himself was Boris Johnson’s Finance Advisor for COP26, as well as the UN Special Envoy for Climate Action and Finance. His chairmanship resulted in the GFANZ gaining much attention during and as a result of COP26.

Financial institutions can join GFANZ by joining one of the following sector-specific alliances:

  • The Net-Zero Asset Managers Initiative (NZAMI)
    The Net Zero Asset Managers initiative (NZAM) is an international group of asset managers committed to supporting the goal of net-zero greenhouse gas emissions by 2050 or sooner, in line with global efforts to limit warming to 1.5 degrees C, and investing aligned with net-zero emissions by 2050 or sooner. (Learn more about the Net Zero Asset Managers initiative)
  • The Net-Zero Banking Alliance (NZBA)
    The Net Zero Banking Alliance brings together banks from a broad set of countries that are committed to aligning their lending and investment portfolios with net-zero emissions by 2050. Combining near-term action with accountability, this ambitious commitment sees banks setting an intermediate target for 2030 or sooner, using robust, science-based guidelines. (Learn more about the Net Zero Banking Alliance)
  • Net-Zero Asset Owner Alliance (NZAOA)
    Net-Zero Asset Owner Alliance is an international group of institutional investors delivering on a bold commitment to transition their investment portfolios to net-zero greenhouse gas emissions by 2050. (Learn more about the Net-Zero Asset Owner Alliance)
  • The Net-Zero Insurance Alliance (NZIA)
    Risk managers, insurers, and investors, and the insurance industry have a key role in supporting the transition to a net-zero economy. NZIA members consist of the world’s leading insurers and reinsurers that will individually set science-based intermediate targets every five years and independently report on their progress publicly on an annual basis. (Learn more about the Net Zero Insurance Alliance)
  • The Net-Zero Financial Services Providers Alliance (NZFSPA)
    The Net Zero Financial Service Providers Alliance (NZFSPA) brings together investment advisors, rating agencies, auditors, exchanges, index providers, ESG research and data providers, and proxy research providers. NZFSPA members have committed to aligning all relevant services and products to achieving net-zero greenhouse gas emissions by 2050, or sooner, and will develop a ground breaking target-setting framework for how the services and products they offer will transform over time to support the transition to a net-zero global economy. (Learn more about the Net-Zero Financial Services Providers Alliance)

Members of each Alliance are accredited by the UN Race to Zero campaign, and they need to set science-based, long-term goals to reach net zero by 2050, or sooner. These will be supplemented with short-term, member-determined targets and action plans.

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