The Glasgow Financial Alliance on Net Zero has issued a draft paper (1) that proposes a new “Expected Emission Reductions” (EER) methodology for measuring financial institutions’ contributions to decarbonizing the economy. GFANZ argues that current approaches to financial sector decarbonization incentivize divestment from high-emission companies, while what is needed, GFANZ claims, is for these companies to be provided with more financing to assist their transition. Reclaim Finance has submitted comments on the paper to GFANZ which have been endorsed by eight other NGOs. The comments warn that while the current approaches to decarbonization pushed by GFANZ and its member alliances need to be greatly improved, the EER approach is fatally flawed, and risks being used to justify continued high levels of finance for fossil fuel companies without putting any meaningful pressure on them to change.
