Daily ESG Briefing: Up to $130trn committed to Net Zero under GFANZ, claims Carney-led group

The latest developments in sustainable finance

The Mark Carney-led Glasgow Financial Alliance for Net Zero (GFANZ) has $130trn in private capital signed up to Net Zero, it has said in its first progress report. Financial institutions join the alliance through one of its sub-networks, which cover net zero commitments from asset managers and owners, banks, insurers, investment consultants and service providers, as well as the investor-led Paris Aligned Investment Initiative. More than 450 institutions from 45 countries are members of one of the sub-networks, and while the exact commitments required by each group differ, all members commit to reaching net zero by 2050 on a 1.5C aligned trajectory. The update comes just days after it emerged that the UN is planning to scrutinise Net Zero pledges from the private sector, after Secretary General Antonio Guterres accused the current commitments of suffering from “a deficit of credibility and a surplus of confusion”.   

Meanwhile, Michael Bloomberg has announced he will join Mark Carney as Co-Chair for GFANZ. Alongside him, Mary Schapiro, former SEC Chairman and Head of the Secretariat for the Task Force on Climate-related Financial Disclosures, will serve as the Vice Chair of the initiative and oversee its secretariat.  

More than 2,600 financial institutions are covered by national climate alignment initiatives, according to new research by 2 Degrees Investing Initiative. In a ‘stock take’ published today, the think-tank identifies 16 countries that have conducted coordinated exercises on aligning the financial sector with climate goals.   

Australia’s ANZ Bank has  launched  a Grievance Mechanism Framework to evaluate and respond to human rights related complaints associated with its corporate lending customers. According to BankTrack ANZ is “the first large commercial bank in the world to adopt a human rights policy that gives communities harmed by financed projects a real path to justice.” 

The global insurance industry is undermining efforts to meet climate targets by continuing to support new oil and gas production, according to the Insure Our Future scorecard. In its fifth year, the scorecard focuses on 30 leading primary insurers and reinsurers, by assessing and scoring their policies on insuring and investing in coal, oil, gas, and other aspects of climate (in)action.   

In other insurance-related news, Europe’s insurance and pensions regulator European Insurance and Occupational Pensions Authority (EIOPA) has said it will finalise in 2022 the first Europe-wide dashboard on the natural catastrophe insurance protection gap, to help inform policy measures. It also said it would deepen its work to integrate ESG risks into the prudential framework of insurers and pension funds.  

74% of institutional investors are now more likely to divest based on poor environmental, ESG performance, than before the COVID-19 pandemic, according to the 2021 EY Global Institutional Investor Survey. The report, which canvassed the views of 320 institutional investors across 19 countries, also highlighted that 90% said they now pay more attention to companies’ ESG performance when making investment decisions.