Addendum to a blog post originally posted on August 31th 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 top three leaders of GFANZ recently issued a statement calling for an end to financing of new coal projects. They should be commended for sending such a clear message on coal \u2014 and for referring to the new Race to Zero requirement for GFANZ members to \u201cphase down and out\u201d support for all \u201cunabated\u201d fossil fuels. However the statement was made only in their personal capacities and is not an official GFANZ statement. GFANZ should issue an official \u201cno coal\u201d position, and its leaders need to make clear in their official capacities that the sectoral GFANZ sub-alliances must update their guidelines to comply with the Race to Zero.<\/b><\/span><\/p>\n<\/div><\/div><\/div> The co-chairs of the Glasgow Financial Alliance on Net Zero (GFANZ), Michael Bloomberg and Mark Carney, and the vice-chair Mary Schapiro, issued a statement \u00a0entitled \u201cNo New Coal<\/a><\/span>\u201d on August 22. The authors say \u201cwe want to be equivocal on this point: there is no rationale for financing new coal projects<\/strong> (original emphasis).\u201d They note \u201call rigorous science-based pathways\u201d show that \u201cnew coal capacity (both extraction and power generation) is inconsistent with achieving net zero and limiting global warming to 1.5\u00b0C<\/strong>.\u201d They also say that they want to reinforce demands \u201cfor the phaseout of all unabated coal in advanced economies by 2030 and globally by 2040,\u201d and they \u201cwelcome the UN Race to Zero\u2019s requirement that members clearly state how they will accelerate the phase-down and phase-out of existing coal assets.\u201d<\/p>\n The statement goes beyond coal to the oil and gas sector in citing the new UN Race to Zero criteria<\/a><\/span> which require GFANZ members to \u201cphase down and out all unabated fossil fuels.\u201d It also cites the text in the Race to Zero\u2019s \u201cInterpretation Guide<\/a><\/span>\u201d that the Race\u2019s members (which include all GFANZ members) \u201cmust restrict the development, financing and facilitation of new fossil assets in line with appropriate scenarios. Across all scenarios this includes no new coal projects.\u201d (1) It is encouraging indeed that these heavyweights of the climate finance world are repeating the Race to Zero\u2019s call for restricting finance for fossil fuel expansion. <\/strong><\/p>\n<\/div> There have been signs in the media recently of pushback from inside the GFANZ alliances \u2014 and even from inside the UN Environment Programme\u2019s financial institutions division, convenor of the three of the alliances \u2014 to the obvious reality that the alliances and their members will have to upgrade their guidelines and policies to align with the new Race to Zero stipulations. (2) So it is particularly encouraging that Bloomberg et al. recognize that the Race to Zero criteria apply to all GFANZ members. The statement explicitly states that:<\/p>\n In line with the UN Race to Zero criteria, members of the net-zero financial sector alliances must identify and end any financing and investing in support of new coal activities. Their compliance with these new criteria will be assessed by June 2023.<\/strong> More generally, as part of their transition planning, members must establish and apply financing policies to phase out and align carbon-intensive sectors and activities, such as thermal coal, oil and gas, and deforestation, not only through asset divestment but also through transition finance that reduces real world emissions.<\/p>\n<\/blockquote>\n The authors note the \u201csignificant operational and social challenges\u201d to ensuring a just transition away from coal. They explain that GFANZ seeks to assist these efforts including via its ongoing work on developing a framework for the managed phase-out of high-emitting assets (3), and its efforts to promote new mechanisms to finance the energy transition in developing countries.<\/p>\n<\/div> The authors conclude by committing to work \u201calongside our teams in the GFANZ secretariat and UN Race to Zero\u201d in order to help the \u201csector-specific alliances, individual financial institutions, and other relevant parties\u201d to overcome the challenges of ensuring a just transition away from coal. It is encouraging to see this commitment, but the GFANZ leaders need to go further than \u201chelping\u201d the alliances and their members to transition away from coal: they need to also help them transition away from all fossil fuels, and insist that they do so, starting with ending their support for fossil fuel expansion.<\/p>\n It is disappointing that the statement contains a disclaimer that \u201c[t]hese remarks reflect the personal views of the authors.\u201d The leaders of GFANZ should be able to speak in their official capacities when discussing the implementation of the Race to Zero criteria given that alignment with these criteria is a basic feature of the GFANZ structure. Furthermore, the good words of this statement must be followed through with actions, in particular to push the sectoral alliances of banks, investors and others that make up GFANZ to update their guidelines and strengthen \u2014 and implement \u2014 their processes for ensuring that their members comply with these guidelines.<\/p>\n<\/div> To clarify the responsibilities of GFANZ members, the alliance should issue an official \u201cno new coal\u201d statement, and its leaders need to make clear in their official capacities that the sectoral GFANZ alliances are required to update their guidelines to comply with the Race to Zero, and to require their financial institution members comply with these guidelines. <\/b><\/span><\/p>\n<\/div><\/div><\/div><\/div><\/div> Notes<\/u><\/span>:<\/span><\/b><\/p>\nPushing back against the pushback<\/h1><\/span>
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Make it official!<\/h1><\/span>
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