If global finance can step up to the net-zero challenge, governments surely can

(Guardian, London, 13 November 2021) A new alliance of financial institutions is committed to funding the changes necessary to avert climate catastrophe. Alliance Chair Mark Carney notes that six years ago, in Paris, countries reached an historic agreement to limit the global temperature rise to less than 2C, targeting 1.5C. "In finance, we launched the task force on climate-related financial disclosures so that companies would disclose their climate-related risks, allowing finance to measure what matters." Despite these breakthroughs, in the years that followed, action didn’t match ambition. Few countries pursued the necessary policies, and business investment in decarbonisation was limited. Too many in finance thought that the climate crisis was someone else’s problem. People will no longer tolerate worthy statements followed by futile gestures. In April, we launched the Glasgow Financial Alliance for Net Zero (GFANZ), which now covers the entire waterfront of finance: banks, insurers, pension funds, export credit agencies and asset managers. It comprises more than 450 leading financial institutions from 45 countries. Its members have committed to managing their assets, which total more than $130tn, in line with achieving 1.5C. The total cost of the global transition is estimated to be about $4tn every year for the next three decades, so there are now more than enough readily available resources to do the job. While this is a watershed achievement, some are understandably sceptical. After all, if governments didn’t follow through after Paris, why would finance after Glasgow? [For example, in another news item, the Bureau of Investigative Journalism has reported that HSBC, on behalf of a group of 12 banks on Prince Charles’s Financial Services Taskforce, coordinated efforts to try and water down GFANZ action on climate change. The Bureau details that HSBC lobbied Mark Carney’s Net Zero Banking Alliance to: remove the list of sectors that must be included in the first round of target-setting; set targets only for sectors where there are “credible transition pathways” to a net-zero future and delay until 2025 or 2030 the deadline for banks to set targets for some carbon-intensive sectors, instead of 18 months from signing the NZBA commitment.]