More than 450 investors, banks, and insurers have signed up to one or more of the seven member alliances and initiatives of the Glasgow Financial Alliance for Net Zero (GFANZ). Most attention, and criticism, has been focused on the long-term commitment these institutions have signed up to – net-zero emissions from their clients by 2050. But perhaps more important is that the GFANZ alliances are committed to halving emissions by 2030. Yet, while the clock is ticking fast, with now less than eight years left to meet this target, very few of the alliances or their members have adopted the policies and frameworks to deliver it.

The clock is ticking…

Looking at the current guidelines of the alliances that make up the Glasgow Financial Alliance for Net Zero, and the policies of their financial institution members, it seems like many may have forgotten to read the fine print before joining GFANZ. In signing up, they have endorsed the criteria of the UN’s Race to Zero Campaign. This commits all the members of GFANZ to cutting their emissions by 50% by 2030, in line with what the IPCC requires to keep warming under 1.5°C, and now less than eight years away (1).

Meeting this “50×30” target will require rapid and sustained action from the GFANZ alliances and their members. Every month of delay in bending the emissions curve sharply downwards increases the rate at which emissions would have to eventually be slashed to hit 50×30. It also increases the disruption that the transition will cause – while reducing the chances of hitting the target. We know where the bulk of emissions are coming from (the production and use of fossil fuels) and the IPCC has told us how much they need to be cut: it is time for financial institutions to start decarbonizing, and fast.

… and the financiers are waffling

Despite this urgency, out of the seven GFANZ alliances only the Net-Zero Asset Owner Alliance (AOA) requires its members to set targets for 2025 – or indeed for any year before 2030. Furthermore, for the alliances with commitments to set 2030 targets, there is little sense of the urgent need to establish these targets and to start acting on them (2).

Banks in the Net-Zero Banking Alliance (NZBA), for example, have 18 months from joining the alliance to set their 2030 targets for some of the industries on a list of nine high-carbon sectors. Then a further 18 months to set targets for a “substantial majority” of the nine sectors. And then an extra year to disclose how they plan to ensure the targets are met (3). In effect, the 43 banks that launched the NZBA in April 2021 have until April 2024 just to decide on how much their highest polluting clients must cut their emissions by 2030, and until April 2025 to tell their shareholders and the rest of the world what actions they are going to take to ensure these cuts happen.

When emission reduction targets don’t require emission cuts

It is also not enough for the GFANZ alliances to just require their members to set top-line targets in a timely manner. The alliances must ensure that what is being measured and what is being cut are real-world emissions.

Yet, even the AOA, the most ambitious of the alliances, is in danger of achieving emission reductions more on paper than in the atmosphere. The AOA’s guidelines require its members to cut their financed emissions by at least 22% by 2025 and 49% by 2030, so basically in line with their 50×30 commitment (4). But, like all the other GFANZ alliances, the AOA members are allowed to set their targets based only on the statistical artifact of emission intensity rather than actual tons of carbon emitted. Intensity targets – such as emissions per barrel of oil produced or per dollar of revenue from oil sales – can allow for real world emissions to the atmosphere to increase under the guise of emission reductions.

In addition, while the AOA “encourages” its members to set targets based on their investees’ Scope 3 emissions (i.e. emissions from the sale of a company’s products), they say they will only require this once better data is available (with no clarity on who will decide when data is sufficient for which industries). This seriously undermines the impact of the AOA’s targets on the emissions of fossil fuel companies, as around 90% of their total emissions is due to others burning and processing coal, oil and gas (5).

When you want to put out a fire, don’t throw more fuel on the flames

At the risk of stating the obvious, GFANZ’s members cannot achieve 50×30 if they continue to finance the expansion of the industries responsible for most emissions. Yet, none of the alliances have clear redlines against fossil fuel expansion. Only the AOA’s new target-setting protocol recommends (but does not require) that its members act on the International Energy Agency’s conclusions that there is no room for expanding oil and gas supply in a net-zero scenario.

Even on coal, the AOA, alone among the GFANZ alliances, has an explicit position calling for an end to financing of all new coal infrastructure but it has not yet required its members to incorporate this demand into their policies. Reclaim Finance’s Coal Policy Tool shows that out of 51 of the AOA’s largest members, 37 have no policy on excluding investments in coal developers, and only six have a robust coal phase-out policy.

With less than eight years left for the members of GFANZ to halve the climate pollution from the companies that they invest in, lend to and insure, 2022 is the year in which they must move from foot dragging and loophole-filled policies, to meaningful emissions-cutting – 50×30 – action.


  1. Becoming a member of GFANZ requires getting accreditation from the Race to Zero, which includes a commitment to setting a target “which reflects maximum effort toward or beyond a fair share of the 50% global reduction in CO2 by 2030”, identified by the IPCC as necessary to stay under 1.5°C. (“Starting Line and Leadership Practices 2.0 – in force from 1 June 2021,” Race to Zero, 2021).
  2. The Net Zero Asset Mangers initiative (NZAM) does not even insist that its members set 2030 targets for reductions across the portfolios they manage, instead requiring them to set targets for the percentage of their portfolios for which they will set targets. On average only 35% of the assets managed by the 43 NZAM signatories who disclosed targets in 2021 are committed to be aligned with net zero by 2030. This average hides a wide range of targets: from 100% of AUM for 11 NZAM signatories, to a low of just 0.55% for BMO Global Asset Management (Canada). The percentage of AUM committed to be aligned with net zero by 2030 varies from 100% for 11 NZAM signatories to a low of just 0.55% for BMO Global Asset Management (Canada). (“Net Zero Asset Managers initiative: Progress Report,” October 2021, p.10.)
  3. Guidelines for Climate Target Setting for Banks,” UNEP-FI, April 2021.
  4. New AOA Target Setting Protocol: Increased ambition, but a missed opportunity,” Reclaim Finance, 25 January 2022.
  5. In addition none of the GFANZ alliances have a clear position limiting the quantity of offsets that their investees/clients can use toward meeting their targets, potentially a significant problem for the integrity of the alliances’ targets given the serious concerns over whether offsets represent genuine emission reductions and the fact that major polluters like Shell intend to buy huge volumes of offsets to meet their supposed reduction targets (see e.g. “Shell’s Carbon Offset Claims Show Task Ahead for UN Climate Talks,” Bloomberg Green, 25 October, 2021).

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