A crucial omission has been identified in the UN Environment Programme Finance Initiative's Glasgow Financial Alliance for Net Zero, announced ahead of President Biden's Earth Day summit. The initiative, which aims to align the banking sector with net-zero targets, makes no mention of a moratorium on new investments in coal, oil, or gas.
Kai Remco Fischer, climate lead for UNEPFI, and consultant Sarah Kemmitt defended the initiative, highlighting that major banks have committed to 2050 net-zero targets and 2030 interim goals consistent with the Paris Agreement's 1.5°C pathway. They emphasised mandatory annual reporting on absolute emissions and sector-specific intensity. However, critics argue that loopholes allow continued funding of new fossil fuel projects, potentially enabling greenwashing.
The European Investment Bank has already imposed a ban on all new fossil fuel investments from 2021. In contrast, the UNEPFI agreement permits banks to choose between absolute emissions targets or intensity targets, which measure emissions per unit of output. This could allow sectors to reduce intensity while increasing overall output, leading to higher total emissions.
When contacted, major UK signatories Barclays, HSBC, Santander, and Lloyds were asked whether science-based targets would preclude new fossil fuel investments. Only HSBC responded with a non-committal statement about aligning with Paris goals using 1.5°C scenarios. Barclays and HSBC rank among the top 13 worst fossil fuel investors globally, according to a Rainforest Action Network report.
Concerns were also raised about Mark Carney, chair of GFANZ and vice-chair of Brookfield Asset Management, which reportedly holds billions in shale oil, coal, and gas investments. The initiative's launch featured Morgan Stanley, described by Carney as being at the forefront of sustainability finance, despite ongoing fossil fuel financing.
