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A group of financial institutions that are committed to reaching zero emissions by 2050 or earlier launched a new alliance Wednesday aimed at pushing the industry and helping it make good on climate promises.
The Glasgow Financial Alliance for Net Zero has more than 160 members that collectively manage more than $70 trillion in assets. It is an umbrella group of sorts for the Net-Zero Banking Alliance — also launched Wednesday — the Net Zero Asset Managers Initiative, and the Net-Zero Asset Owner Alliance. An insurance company alliance is also in the works.
“In this area, there is no need to compete. We need to figure out how to achieve this together,” said Thomas Nides, managing director and vice chairman at Morgan Stanley, at a launch event.
What it is: One of the alliance’s goals is to encourage more of the financial sector to agree to net-zero targets. It’s also seen as a key platform for collective action as these financial companies operationalize their commitments and ensure that customers throughout their supply chains are on board.
The effort is crucial to helping set targets and report on progress as well, said Noel Quinn, CEO at HSBC, at the launch event. Work is underway on a guide to help move companies from “good intent to a well-monitored, understandable action plan,” and it should be released in a few months, he said.
Why it matters: If financial institutions follow through on these commitments, they could have a dramatic impact not only on emissions but in driving capital to efforts to combat climate change. But there has to be a “just” transition with different strategies for countries depending on their emissions and income levels, climate advocates and financial leaders said.