A global coalition of NGOs has called on the Net-Zero Banking Alliance (NZBA) members to set more stringent rules on financing fossil fuel projects at Climate Week NYC.
ShareAction, BankTrack, Reclaim Finance and the Sierra Club have stated their wishes for the new rules to match criteria issued by the U.N.’s Race to Zero campaign in June.
Climate Week New York (19-25 September) took place against the backdrop of Russia’s invasion of Ukraine, and another wave of climate change-exacerbated natural disasters – most recently the devastating floods in Pakistan and Nigeria.
“In order for financial institutions’ net zero commitments to be credible, they must explicitly commit to phase out financing for new fossil fuels,” said Sierra Club’s Fossil-Free Finance campaign representative Adele Shraiman. “It’s time for the NZBA to make clear that banks who continue to finance massive fossil fuel expansion, while making grand pronouncements about climate goals, are not welcome in the alliance.”
The NZBA, part of the Glasgow Financial Alliance on Net Zero (GFANZ) weakened its language on phasing out coal and other fossil fuels after a number of banks, including JPMorgan Chase, Bank of America, and Morgan Stanley, raised legal concerns related to phasing out the commodities and antitrust rules.
In response, U.N. climate champion Nigel Topping played down fears that commitments are being weakened. Instead, saying Race to Zero members have to sign up to science-based targets, which preclude new coal developments.
But Planet Tracker head of research, John Willis, commented: “There is a concern about these big alliances. They can generate a form of ‘greencrowding’, where organisations hide in the crowd of members and move at the speed of the slowest. I hope they’re not backtracking.”
Rather than having an explicit ban on funding new coal projects, the Race to Zero campaign now says that banks should phase out the “development, financing and facilitation of new unabated fossil-fuel assets, including coal, in line with appropriate global, science-based scenarios.”
Likewise, the new Global Registry of Fossil Fuels, launched in New York by the Carbon Tracker Initiative and the Global Energy Monitor, will help to tackle greenwashing. The register includes data on oil and gas reserves, production and emissions for more than 50,000 fields around the world.
The data can be analysed by investors to understand which assets could be at risk of being uneconomic, or “stranded”, in the low-energy transition, said Alex Rafalowicz, director of the Fossil Fuel Non-Proliferation Treaty initiative. “The registry is the transparency tool that has been missing in our toolkit for holding governments and corporations accountable on fossil fuel production.”
According to the Capgemini Research Institute, although 85% of organisations recognise the business value of emissions measurement and analytics, half of those it surveyed said that they were not equipped to capture or use the data they generate to drive decision-making.
Especially for Scope 3 emissions, in companies’ supply chains and in the use of their products. “The coverage of Scope 3 emissions, accounting for a significant 65‒95% of a company’s carbon footprint, is especially low,” said Zhiwei Jiang, chief executive of Capgemini’s insights and data global business. “Additionally, only 43% of organisations have set short-term targets to support their net zero ambitions.”
