Just weeks before the UK hosted the COP26 climate summit, around 90 climate groups wrote to UN Special Envoy Mark Carney urging him to “stop laundering financial institutions that continue to invest in expanding fossil fuel infrastructure ”.
Groups, which have also placed ads in the Financial Time and Toronto Star today argued that while his work in calling financial institutions to take climate action is laudable, Carney “is facilitating the relaxation of net zero rules for finance,” the climate groups said, “because its green alliances do not adopt the latest Energy Agency (IEA) Conclusions on net zero emissions.
Members of the alliances continued to support expanding businesses in the coal, oil and gas industries, with civil society arguing that this must end for the alliances to be fit for purpose, the groups said.
The groups are calling on the former Bank Governor of England and Canada to incorporate the IEA’s findings into the Glasgow Financial Alliance for Net Zero (GFANZ), which sets guidelines for investors, banks and insurers who have joined in to show their commitment to net zero emissions.
The IEA has said that no expansion of coal, oil or gas is allowed if we are to limit the increase in global temperature to 1.5 ° C, a conclusion that leads to a global consensus that, to achieve the goals of the Paris Agreement, there is no room for further development of fossil fuels.
“The membership requirements for these zero net initiatives are too low and therefore these alliances are doing the opposite of what they are supposed to do,” explained Richard Brooks, director of climate finance at Stand.earth.
“Rather than forcing banks and other financial institutions to step up their climate action, they are giving them the cover to continue their dirty financing of fossil fuel companies. We are running out of time and we cannot waste it in other discussions on greenwashing, ”he added.
Citi, Deutsche Bank and HSBC
Many of the financial institutions that have joined GFANZ remain among the world’s largest fossil fuel donors. In fact, many financial institutions, since becoming members of GFANZ, have provided new funding to companies developing fossil fuel infrastructure.
For example, Citi, Commerzbank, and Bank of America are all members of GFANZ and help organize funds for SUEK, a Russian coal giant that relies on this additional funding to expand its coal and power mining business.
Brookfield, a member of the Net Zero Asset Managers Initiative, of which Carney is vice president, is working on the purchase of Inter Pipeline, one of the largest oil sands and gas infrastructure companies in Canada.
Members of GFANZ, Deutsche Bank, MUFG and Crédit Agricole, also recently signed bond issues for Enbridge, which is actively building Line 3 and five pipelines despite indigenous peoples’ objections and rising emissions.
A large number of banks, including HSBC and Citi, finance the extraction and expansion of oil in the Amazon.
COP26, which has been dubbed the “finance COP”, drew attention to the actions of the UK government and its financial industry.
“There is growing concern that as the conference approaches, financial institutions will use industry initiatives like GFANZ as a cover for their continued support for the expansion of coal, oil and gas,” said the groups said in their press release.
“Eliminating net zero emissions allows harmful extractivism to continually undermine the rights of indigenous peoples and their lands,” said Amber Bernard, external media coordinator at Indigenous Climate Action.
We need to divest ourselves from dirty oil and gas industries, especially when they lack the free and prior informed consent of indigenous peoples.