Have things improved since the Glasgow climate conference in 2021?
Many of the biggest players in global finance have accepted their role in addressing the climate crisis and have joined the Glasgow Financial Alliance for Net-Zero (GFANZ). GFANZ was a product of the 2021 COP26 climate change conference held in Glasgow. By joining the alliance, they have committed not just to reaching net zero by 2050, but also to the 1.5°C target, and to taking immediate action to halve emissions by 2030, now just seven years away.
But a January 2023 report (Throwing fuel on the fire) from French campaign organisation, Reclaim Finance, showed that the message on the incompatibility of net zero and fossil fuel expansion is yet to be taken on board by the big GFANZ players. According to the report they are
"continuing to pour hundreds of billions of dollars into the biggest corporations that are developing new fossil fuel projects".
Of the 161 GFANZ members, only 61 had policies excluding new coal projects. Only one member had any meaningful restriction of new oil and gas projects. Ten of the members are companies featuring in some of our finance guides and the table below shows how much they are still investing whilst allegedly "striving for net zero by 2050".
Vanguard had more than twice as much investment in new coal and new oil & gas as all the other companies on this table combined.
Investors in the largest fossil fuel expanders (ranked by total funding)
|New oil &
|JP Morgan Chase
|Legal & General
* no coal, oil or gas breakdown for $10,000 million of this total
The members of the biggest sector alliance, Net Zero Asset Managers (NZAM), have also not voted for all the climate resolutions at companies they invest in. ShareAction found that NZAM members supported just 63% of climate resolutions, compared to 61% backed by non-members. This throws into question whether the initiative is meaningfully ensuring members are using their voting rights to drive action on climate change or whether it is largely an exercise of greenwashing.
What needs to happen?
Reclaim Finance concludes that, if they are to be seen as credible, the alliances’ guidelines and protocols need urgently to be updated to require their members to phase out the provision of financial services for fossil fuel expansion. That would include:
- immediately dropping support for the developers of new coal projects
- withdrawing support from companies expanding oil and gas production
“Financing fossil expansion means handing to the fossil fuel industry funds that could have gone to building out renewables and batteries, developing new electric powered arc-steel furnaces, or helping to pay for a just phase-out of coal and gas power plants. In continuing to finance fossil expansion, GFANZ members are sending a message to the rest of the finance sector, to industry, and to governments, that as long as the fossil companies want to keep destroying the climate upon which we all depend, that the finance will be there to support them."