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GFANZ Plots Path Toward Net Zero Transition

The Glasgow Financial Alliance for Net Zero (GFANZ) presented its 2023 Progress Report on COP28 Finance Day, outlining a significant surge in finance firms embracing the net zero transition. The initiative noted tangible strides in transition planning, capital mobilisation in emerging markets and developing economies (EMDEs), and climate transition-related data. At COP28, GFANZ spearheaded the creation of the Global Capacity Building Coalition, aimed at aiding financial institutions in EMDEs in response to appeals for assistance in crafting transition plans. Further, GFANZ’s Secretariat released a Technical Review Note on Scaling Transition Finance and Real-economy Decarbonisation , which addresses the need to direct finance toward carbon-intensive sectors. The Secretariat plans to collaborate with stakeholders to expand on this work throughout 2024 and beyond. GFANZ also released guidance for the managed phaseout of coal-fired power plants in the Asia Pacific region. Recognising the significant impact of phasing out coal power, GFANZ aims to assist financial institutions, coal power operators, and governments in devising plans that ensure a just and orderly transition. The Alliance noted that around 250 financial institutions will have published their transition plans based on the Net Zero Transition Plan (NZTP) framework within the next year. Further, policymakers in major economies like the US, UK, EU, Singapore, and Hong Kong have recommended or mandated transition planning by financial institutions and businesses. The GFANZ Principals Group, led by Michael Bloomberg, UN Special Envoy on Climate Ambition and Solutions, and Mark Carney, UN Special Envoy on Climate Action and Finance, also announced priorities for 2024, including integrating nature into net zero transition plans, developing net zero indices, and measuring the impact on emissions. Membership in sector-specific alliances associated with GFANZ surged over 20%, encompassing more than 675 financial institutions from 50 nations. Notably, the alliance welcomed two new net-zero alliances, a third regional network, and the launch of two chapters during 2023. 

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