Just weeks before the UK hosts the COP26 climate summit, around 90 climate groups have written to UN Special Envoy Mark Carney and place ads in the Financial Times and Toronto Star today, urging him “to stop greenwashing financial institutions that continue to invest in expanding fossil fuel infrastructure.”
The groups said that, while his work to convene financial institutions to take climate actions is laudable, Carney is “facilitating the watering down of net zero rules for finance,” the climate groups said, “as his green alliances fail to adopt the latest International Energy Agency (IEA) findings on net-zero emissions.”
Members of the alliances have continued supporting companies expanding coal, oil and gas industries, with civil society arguing that this must end for the alliances to be fit for purpose, the groups pointed out.
The groups are asking the former Governor of the Banks of England and Canada to integrate the findings of the IEA into the Glasgow Financial Alliance for Net Zero (GFANZ), which sets guidelines for the investors, banks, and insurers who have joined to show their commitment to net zero emissions.
The IEA has said that no more coal, oil, or gas expansion are permitted if we are to limit global temperature rise to 1.5°C, a finding that is driving a global consensus that in order to meet the goals of the Paris Agreement, there is no room for any further fossil fuel development.
“The membership requirements for these net zero initiatives are set too low and as a result these alliances are doing the opposite of what they’re supposed to,” explained Richard Brooks, Climate Finance Director with Stand.earth.
“Rather than forcing banks and other financial institutions to step up their climate action, they’re giving them the cover to continue their dirty financing of fossil fuel companies. We are running out of time and can’t waste it on more greenwashing talk,” he added.
Citi, Deutsche Bank and HSBC
Many of the financial institutions who have signed onto the GFANZ remain among the world’s top backers of fossil fuels. In fact, many financial institutions, since becoming members of GFANZ, have issued new financing to companies expanding fossil fuel infrastructure.
For example, Citi, Commerzbank, and Bank of America are all GFANZ members and helping to arrange funds for SUEK, a Russian coal giant that is relying on this extra financing to expand its coal mining and power business.
Brookfield, a member of the Net Zero Asset Managers Initiative, and of which Carney is Vice Chair, is working to purchase Inter Pipeline, one of the largest oil sands and gas infrastructure companies in Canada.
GFANZ members Deutsche Bank, MUFG, and Credit Agricole also recently inked bond issuances for Enbridge, which is actively building Line 3 and five oil pipelines over objections from Indigenous peoples and increasing emissions.
A large number of banks, including HSBC and Citi are financing Amazon oil extraction and expansion.
COP26, which has been billed the ‘finance COP’, has focused attention on the actions of the UK government and its finance industry.
“There is growing concern that in the run-up to the conference financial institutions are using industry initiatives like GFANZ as cover for their continued support for coal, oil and gas expansion,” the groups said in their statement.
“The washing down of net-zero emission allows harmful extractivism to continually infringe on the rights of Indigenous peoples and their lands,” said Amber Bernard, External Media Coordinator with Indigenous Climate Action.
We need divestment from dirty oil and gas industries, especially when they don’t have the free and prior informed consent of Indigenous peoples.