The Glasgow Financial Alliance for Net Zero (GFANZ), a practitioner-led, global coalition of financial institutions working to accelerate the world’s transition to net-zero greenhouse gas (GHG) emissions by 2050, invited public comment on its draft Net-zero Transition Plan (NZTP) framework for the financial sector.
This common framework will enable a financial institution to demonstrate, and stakeholders to judge, the credibility of its plan to accelerate and scale clean energy and transition-related finance to levels consistent with limiting global warming to 1.5 degrees Celsius.
“The GFANZ common framework for net-zero transition will help ensure that capital will flow to companies that have robust and credible plans to reduce their emissions while growing jobs and our economies. The supporting tools will promote the responsible and transparent phaseout of stranded assets as part of an orderly transition,” said Mark Carney, co-chair of GFANZ and United Nations (UN) Special Envoy on Climate Action and Finance. Carney previously served as the governor of the Bank of Canada.
“Together, these tools, frameworks, and resources will guide the financial sector to support real-world decarbonisation, not the false comfort of portfolio decarbonisation. In the process, they will reveal the contribution of financial institutions to solving one of humanity’s greatest challenges.”
Approximately 130 countries — representing 90 percent of global GDP — have made a net-zero commitment. More than 10,000 companies, organizations, or subnational governments have joined the UN Race to Zero campaign, committing to achieve net-zero carbon emissions by 2050 at the latest. Net-zero transition plans catalyze action, operationalize commitments, and demonstrate credibility. GFANZ defines a net-zero transition plan as a set of goals, actions, and accountability mechanisms to align an organization’s business activities with a pathway for net-zero GHG emissions that delivers real-economy emissions reductions in line with achieving global net zero.
As part of the recommendations and guidance published, GFANZ has identified four essential approaches for financial institutions to support the real-economy transition to net-zero emissions:
- Finance the development and scaling of net-zero technologies or services to replace high-emitting sources
- Increase support for companies that are already aligned to a 1.5 degrees C pathway
- Enable high and low-emitting real-economy companies to align business activity consistent with a 1.5 degrees C pathway for their sector
- Accelerate managed phaseout of high-emitting assets through early retirement
To participate in the consultation, use this link. To view the set of tools, frameworks and resources, visit www.gfanzero.com/publications.
Image Credit: Mark Carney/Twitter.
Image Credit: Getty Images
