Share Action, Reclaim Finance and Make My Money Matter have questioned the pledge
The Glasgow Financial Alliance for Net Zero’s (GFANZ) pledge to achieve net zero by 2050 is a “hot air commitment”, according to some industry experts, who warn that “now is the time for action, not words”.
Last Wednesday (3 November), it was announced the Mark Carney-led cohort of financial firms had committed $130trn (£95.8trn) of capital to reach net zero emission targets by 2050, and can deliver $100trn of investment needed to reach net zero.
However, Share Action senior manager Jeanne Martin warned "there are two problems with GFANZ's numbers".
"Firstly, the $130trn figure is simply wrong," she said. "It counts the total financial assets of all the members of the various GFANZ groups and adds them up to $130tn.
"It is true these financial institutions have all committed to reach net zero, but dig into the numbers and you see that they are not making this commitment for all of their assets."
Martin said on average, Net Zero Asset Managers initiative members have only committed 35% of their assets to net zero, with some pledging as little as 1%.
In terms of being able to deliver $100trn to reach net zero, she argued there is "no guarantee we will get those capital investments" due to minimal regulation.
"It is like saying ‘we have produced enough food to feed eight billion people; therefore we have solved global hunger' - the two are not the same thing."
Reclaim Finance executive director Lucie Pinson added: "More than $130trn in assets under management and not a single rule to prevent even one dollar from being invested in the expansion of the fossil fuel sector.
"Once again, the financial sector is willing to puff itself up with hot air commitments instead of enacting the concrete cuts in oil, gas and coal financing we really need."
Make My Money Matter chief executive Tony Burdon said while "the power, potential and responsibility" of GFANZ is "extraordinary", "now is a time for action, not words".
"The first action must be aligning delivery to a credible 1.5°C pathway," he reasoned. "This means reducing emissions immediately, halving emissions this decade and halting investment in new fossil fuel expansion as advised by the International Energy Agency.
"There is no time for equivocation, delay or greenwash - nothing but immediate action in line with the science will suffice."
