The Glasgow Financial Alliance for Net Zero (GFANZ) released a consultation paper in June 2023 on financing managed phaseouts of coal plants in the Asia Pacific (APAC) region. The paper was produced by a working group of the GFANZ APAC Network co-led by German asset manager, DWS and UK bank, HSBC. Other members of the working group include Allianz Global Investors, BNP Paribas Asset Management, five of the largest Japanese banks and investors, the Asian Development Bank, and NGOs including offsetting verification entity Gold Standard. Reclaim Finance submitted comments on the paper, noting that financial institutions would need to put strict guardrails on any new investments in coal companies to ensure that finance goes to 1.5°C-aligned phaseouts and that none goes to entities building new coal plants, mines or other infrastructure.
The paper notes that keeping warming under 1.5°C will require a total phaseout of the 5,000 unabated coal power plants in the Asia Pacific region by 2040. It suggests mechanisms for raising finance to pay for a just transition away from coal power and toward renewables.
Reclaim Finance’s comments include a call on GFANZ to insist that coal phaseouts ensure the unfettered participation of civil society organizations, and that coal power must be replaced with sustainable renewables and not other high-carbon fuels like fossil gas, biomass, and ammonia. Reclaim Finance also notes that financing coal phaseouts with carbon offsets would negate the phaseouts’ climate benefits and open the process to the fraudulent practices that beset offsetting schemes around the world.
Read the GFANZ Asia Pacific Network consultation paper.