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GFANZ ‘Quiet Quits’ Race to Zero

The Glasgow Financial Alliance for Net Zero (GFANZ) 2022 progress report appeared to confirm the alliance’s intention to allow member groups to set their own path to net zero rather than requiring them to closely follow the guidance of the UN-backed Race to Zero (RtZ) campaign. Having insisted that “all GFANZ members must align with the Race to Zero” in its 2021 report, the alliance, which represents more than 500 finance sector organisations via its seven member groupings, now says members will “take note of the advice and guidance” of Race to Zero alongside other bodies and “engage actively with them”. The shift follows concerns flagged by US banks of the legal, reputational and political risks of having policies imposed by external parties, notably in relation to the phasing down of fossil fuel investments, including coal, following changes to RtZ’s rules earlier this year. The progress report also highlights GFANZ’s work on transition planning for financial institutions and corporates, portfolio alignment measurement and phasing-out of high-emitting assets, as well as plans for a centralised climate data utility intended to “all stakeholders to easily access and interpret climate commitments and actions taken” by members and other organisations. Noting that GFANZ sub-alliances currently remain Race to Zero members, Paddy McCully, Senior Analyst at Reclaim Finance, said: “Regardless if any ‘net zero’ or ‘1.5-aligned’ alliance or financial institution commits to following the Race to Zero criteria, the credibility of its climate policies will continue to be judged against these criteria, and in particular on their continued financing for companies expanding the supply of fossil fuels.”

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