Addendum to a blog post originally posted on July 20th 2022:<\/strong><\/span><\/p>\n In September 2022, in response to legal concerns, the Race to Zero made some minor changes to the language in paragraph 5 of its Interpretation Guide on restricting the development, financing and facilitation of new fossil fuel assets. This original language is quoted in the article below. The new language reads \u201cEach Race to Zero member shall phase out its development, financing, and facilitation of new unabated fossil fuel assets, including coal, in line with appropriate global, science-based scenarios\u201d and so retains the requirement for Race to Zero members to end their support for fossil fuel expansion.<\/p>\n<\/div><\/div><\/div> The Glasgow Financial Alliance on Net Zero (GFANZ) is currently seeking comments until July 27th 2022 on proposed recommendations for financial institution net-zero transition plans. Because of their endorsement of the Race to Zero, all of the nearly 500 members of GFANZ are required to publish net-zero transition plans by June 2023. Reclaim Finance underlines that GFANZ needs to clarify several key criteria that should be included in financial institution transition plans, especially: a commitment to halving emissions by 2030; an immediate end to support for fossil fuel expansion, and clear targets to ensure the phasing out of financial support for fossil fuels on a 1.5\u00b0C-aligned timetable. <\/b><\/span><\/p>\n<\/div><\/div><\/div> A basic element of joining GFANZ is to also become a member of the UN\u2019s Race to Zero campaign. In June 2022<\/span>,<\/span> the Race to Zero <\/span>released an update<\/a><\/span> to its criteria which, among other new requirements, insist that its members produce a plan explaining how they will meet the other Race to Zero criteria. These plans should describe what actions will be taken within the next year, two to three years, and by 2030. Members need to disclose these plans within a year of joining the Race to Zero. Existing members have to disclose them by June 2023.\u00a0<\/span>\u00a0<\/span><\/p>\n At the same time as the Race to Zero released their new criteria, GFANZ <\/span>released<\/span> a draft<\/a> of <\/span>a<\/span> detailed set of recommendations for \u201cambitious and credible\u201d financial institution net-zero transition plans.<\/span> This paper states that transition requires \u201c<\/span>rapid scaling of climate solutions to replace fossil fuels and the accelerated phaseout of fossil fuel energy sources in an orderly and just manner<\/span><\/b>.\u201d It notes that any continued financing of fossil fuels \u201cshould be consistent with a 1.5\u00b0C pathway to ensure the energy sector continues along a net-zero transition and is not creating assets that will be stranded,\u201d and \u201cshould be vigorously scrutinized to ensure net-zero alignment.\u201d\u00a0<\/span>\u00a0<\/span><\/p>\n Credible and transparent financial institution transition plans \u2014\u202fif accompanied with regular reporting on their implementation \u2014 allow their shareholders, regulators and other analysts to hold them accountable to their climate commitments. It is important to note that financial institutions should require their clients and investees, regardless of whether or not they have signed up to the Race to Zero, to develop their own transition plans. GFANZ is <\/span>currently working on<\/a><\/span> advice for what its members should expect from corporate transition plans (what GFANZ calls \u201creal-economy\u201d transition plans). These corporate transition plans allow financial institutions to monitor whether their clients and investees are serious about aligning with 1.5\u00b0C.\u00a0<\/span>\u00a0<\/span><\/p>\n Reclaim Finance has submitted comments to GFANZ on its draft recommendations. Our key comments on what improvements are needed to this paper are explained below:<\/span>\u00a0<\/span><\/p>\n Respond to the GFANZ consultation (open until July 27th 2022) <\/a><\/u><\/p>\n<\/div> Notes<\/span> :<\/span><\/u><\/b><\/p>\n\n
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