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August 12, 2022

GFANZ, net zero portfolios and coal financing

Emily (Pexels)
Emily (Pexels)

The Glasgow Financial Alliance for Net Zero has released guidelines to encourage the alignment of metrics used to stir investment portfolios towards net zero targets. (You may have already seen the details – if not, you can find them here.)

You may also be interested in seeing how many of the GFANZ largest members have exclusion policies on new coal projects (60 out of 240) or rule out providing any financial services to companies involved in those projects (11).

These numbers can be problematic. GFANZ requests signatories to follow the UN-backed Race to Zero’s guidelines; but Race to Zero has recently said that it is “making explicit the requirement for members to phase down and out all unabated fossil fuels as part of a just transition, something which was previously implicit. In practice, this means corporations and investors must restrict the development, financing, and facilitation of new fossil fuel assets, which includes no new coal projects.”

Our colleagues at the Financial Times Moral Money team have put together a brief analysis on this. If you’re not a subscriber, you can register here for a 30-day trial.

As for the GFANZ net zero portfolio guidelines, you have until September 12 to provide feedback (if you manage to squeeze in yet another public consultation to your ESG work).

A service from the Financial Times