More than 450 financial firms, from 45 countries, responsible for more than $130 trillion in financial assets, have committed to aligning their operations and financing with achieving 1.5C - as set out by the Glasgow Financial Alliance for Net Zero in its first progress report. Oliver Wyman is proud to be supporting the Glasgow Financial Alliance for Net Zero as its Knowledge Partner.
The Glasgow Financial Alliance for Net Zero (GFANZ) is a global coalition of leading financial institutions in the UN’s Race to Zero that is committed to accelerating and mainstreaming the decarbonisation of the world economy and reaching net-zero emissions by 2050. It provides apractitioner-led forum for financial firms to collaborate on substantive, crosscutting issues that will accelerate the alignment of financing activities with net zero and support efforts by all companies, organisations, and countries to achieve the goals of the 2015 Paris Agreement.
The collective goal of GFANZ is to bring together the best thinking from across the financial sector, the real economy, and NGOs to accelerate progress, elevate and mainstream best practices, and promote upward convergence around frameworks and tools that solve the thorniest challenges facing the sector’s net-zero efforts.
This report details the progress GFANZ has made in the six months since launching in April 2021, and shares the near-term work plan and ambitions.
With the support of investors, NGOs, the public sector, and other stakeholders, the financial industry has made significant progress over the last few years:
- It is now commonplace for financial institutions to disclose climate risks and opportunities using the Task Force on Climate-related Financial Disclosures (TCFD) framework, and the industry has also achieved increased disclosure among the companies it finances.
- Common standards are emerging that quantify the emissions financed by financial institutions and the impact of climate change on the industry’s portfolios. Both have started to be priced into financing activities.
- The financial industry has developed — and continues to develop — common views with real economy actors on net-zero pathways for key sectors.
- Between 2011 and 2020, nearly $4 trillion has been channelled to finance energy transition investments,10 with over $1.5 trillion in green bonds issued since market inception in 2007.
The challenge posed by pivoting the global economy to net zero continues to intensify. Looking beyond COP26, GFANZ plans to reinforce their global reach through regional hubs and will continue to embed links with national and international policymakers to drive and institutionalize the net-zero transition. This work will intensify and accelerate in the journey to turn this enormous challenge into an opportunity for sustainable growth.