New Financial Alliance for Net Zero Emissions launches with 43 banks from 23 countries (with assets of $28.5 trillion). “We encourage all banks to set targets to reach net-zero well before 2050.”

The Glasgow Finance Alliance (GFANZ) includes 160+ financial institutions across Race to Zero initiatives. These institutions include: 87 asset managers representing US$36.95 trillion in assets under management; 42 banks with US$28.5 trillion in assets; and 58 asset owners with US$7.4 trillion in assets under management. Each entity has made its own net zero commitment with potential overlap across initiatives, institutions and assets. The goal is to accelerate the transition to net zero emissions by 2050 at the latest.

All GFANZ member alliances must be accredited by the UN Race to Zero campaign. They must use science-based guidelines to reach net zero emissions, cover all emission scopes, include 2030 interim target setting, and commit to transparent reporting and accounting in line with the UN Race to Zero criteria.

GFANZ will work to mobilise the trillions of dollars necessary to build a global zero emissions economy and deliver the goals of the Paris Agreement. GFANZ will provide a forum for strategic coordination among the leadership of finance institutions from across the finance sector to accelerate the transition to a net zero economy. All initiatives in GFANZ require signatories to set science-aligned interim and long-term goals to reach net zero no later than 2050 in line with Race to Zero’s criteria. These goals are supplemented by member-determined short-term targets and action plans.

GFANZ will ensure that commitments are backed by interim targets (2030 or sooner), alongside robust transition plans consistent with 1.5°C above pre- industrial levels as required by Race to Zero.

UK Prime Minister, Boris Johnson, said: “Uniting the world’s banks and financial institutions behind the global transition to net zero is crucial to unlocking the finance we need to get there – from backing pioneering firms and new technologies to building resilient economies around the world. The Glasgow Financial Alliance for Net Zero will lead this charge ahead of COP26 to scale-up our ambition, accelerate our shift and help us to build back greener together.”

U.S. Special Presidential Envoy for Climate John Kerry said: “The largest financial players in the world recognize energy transition represents a vast commercial opportunity as well as a planetary imperative. As countries around the world move to decarbonize, the large sums these institutions are dedicating to climate solutions reflect a growing understanding that the transition to a low-carbon global economy will be critical for their business models. To be credible and effective as market signals, these financial commitments should adhere to clear definitions, metrics, and reporting. Ultimately, the transition to this new economy will create a massive number of new jobs and increase our collective ability to tackle climate change.”

COP26 President-Designate, Alok Sharma, said: „Without adequate finance, we simply will not achieve the change needed to safeguard our planet for future generations. As the world continues down a crucial decade of delivery on climate action, GFANZ will ensure much-needed acceleration towards net zero by uniting some of the world’s most powerful financial actors. I look forward to seeing this new alliance drive up ambition as we look to COP26 and beyond.„

Mark Carney, UN Special Envoy for Climate Action and Finance and Prime Minister Johnson’s Climate Finance Advisor for COP26, said: “This is the breakthrough in mainstreaming climate finance the world needs. I welcome the leadership of the SMI Financial Services Task Force and other global banks for their new commitments to net zero and for joining forces with GFANZ, the gold standard for net zero commitments in the financial sector. Most fundamentally, GFANZ will act as the strategic forum to ensure the financial system works together to broaden, deepen, and accelerate the transition to a net zero economy.”

Inger Andersen, Executive Director of the UN Environment Programme said: “In a critical year for climate and nature, these alliances speak to the high level of commitment and ambition that the world urgently requires from the financial sector. The end goal is a net-zero transition of the economy in line with science. Nothing less. Immediate, transparent and accountable actions underpin these commitments, and we encourage all financial institutions to follow their peers in committing to achieving the drastic reduction of emissions required over the next decade if we are to succeed in limiting global temperature rise to 1.5°C.”

Nigel Topping, High-Level Climate Champion for COP26, said: “Already, a fundamental shift in capital is accelerating, with the world’s largest asset owners and managers – and now banks – joining the Race to Zero. But the finance gap remains in the trillions of dollars, particularly for developing economies, and concerted efforts are needed to translate necessary solutions into investable propositions, which is why I am delighted to be collaborating on GFANZ.”

Noel Quinn, Chair of SMI Financial Sector Taskforce and Group Chief Executive of HSBC, said: “A commitment to financing the transition to net zero is essential. It’s important that the banking sector is committed to providing the financial support needed to help customers on that transition. But we have to establish a robust and transparent framework for monitoring progress against that objective and we want to set that standard for the banking industry. Industry-wide collaboration is essential in achieving that goal. I’m delighted that banks from the SMI Financial Services Taskforce have joined forces to establish the Net Zero Banking Alliance.”

Ana Botin, Group Executive Chairman, Banco Santander, said: “If we are to green the world’s economy, we need a truly global effort – banks, companies, governments, regulators and civil society working together at pace. At Santander we are proud to be part of the founding members of this new alliance, and to accelerate progress towards net zero.”

Bringing in global banks

The industry-led Net-Zero Banking Alliance (NZBA), convened by the UN, joins the Race to Zero and brings together 43 banks from around the world — from Latin America to Asia to Africa – elevating the vital role of banks in supporting the global transition of the real economy to net-zero emissions.

All banks that have signed the commitment will:

. Align operational and attributable emissions from their lending and investment portfolios with pathways to net-zero by 2050 or sooner.

. Within 18 months of joining, set 2030 targets (or sooner) and a 2050 target, with intermediate targets to be set every 5 years from 2030 onwards. All targets will be regularly reviewed to ensure consistency with the latest science (as detailed in IPCC assessment reports).

. Banks’ first 2030 targets will focus on priority sectors where the bank can have the most significant impact, ie. the most GHG-intensive sectors within their portfolios.

. Within 36 months of joining, banks will set a further round of sector-level targets for all or a significant majority of specified carbon-intensive sectors, including: agriculture; aluminium; cement; coal; commercial and residential real estate; iron & steel; oil & gas; power generation; transport.

. The commitment is designed to ensure that banks engage with their clients’ own transition and decarbonisation, promoting real economy transition

. Annually publish absolute emissions and emissions intensity in line with best practice and within a year of setting targets, disclose progress against a board-level reviewed transition strategy setting out proposed actions and climate-related sectoral policies.

. Take a robust approach to the role of offsets in transition plans.