Mark Carney has denied that major US banks are considering leaving his coalition of global financial institutions committed to carbon-neutral emissions, a week after media reports suggested the group was at risk of breaking ranks due to legal concerns.
Mr. Carney, a former governor of the Bank of Canada who later became governor of the Bank of England, told British parliaments on Monday that the coalition, called the Glasgow Financial Alliance for Net Zero ( GFANZ), is making progress in its goal of getting 500 member firms to provide data that reflects their goals and strategies.
Under the group’s rules, all its members must align their investments with the guidelines set by Race to Zero, a United Nations campaign that leads carbon reduction programs for entities below the national government level. Banks reduce their carbon footprint by reducing investments in companies that produce negative greenhouse emissions or by helping those companies implement technologies such as carbon capture.
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Last month, The Financial Times and Bloomberg reported that JP Morgan Chase, Morgan Stanley and Bank of America all said in closed meetings that they planned to quit. GFANZ and its subsidiary, the Net Zero Banking Alliance. Banks fear that if they, as a group, are allowed to divest from investments in major investment sectors, they will be subject to antitrust enforcement.
Mr. Carney, who now serves as the United Nations special envoy for climate action and finance, said his special the owners of those banks have revealed let them be committed to working together.
“A: They didn’t leave. AB: They have not told me that they intend to do that,” he told the British House of Commons environmental review committee. “I put more weight into the conversations I’ve had with CEOs than the nonsense I’ve read in the press and other people have told me.”
Mr. Carney at the COP26 climate conference in Glasgow last year has grown GFANZ, then six months old, to include 400 banks, insurers and asset managers responsible for $130 -trillion for assets. The team has expanded. With COP27 starting in Egypt next month, GFANZ is now working to increase the participation of businesses in Asia and Africa.
Over the summer, Race to Zero released new guidelines that included a call for members to “decline and divest” the development and financing of new fossil fuel resources, instead of spending new to coal. These words caused confusion among banks, and Race to Zero issued a clarification in September. The change was accomplished potential legal problems by adopting the requirements for common strategies among members, said Mr. Carney. “It’s a problem that needs to be reconciled,” he added.
JP Morgan Chase spokesman Steve O’Halloran declined to comment on Mr. Carney. Officials with Morgan Stanley and Bank of America did not immediately respond to requests for comment.
GFANZ aims to align global financial systems behind the goal of limiting the average rise in global temperatures to 1.5 degrees above pre-industrial levels by 2050. That’s what scientists say is necessary to avoid the worst effects of climate change.
Canada’s biggest banks have expressed dismay at the implications of their involvement in GFANZ, senior banking sources told the Globe and Mail late last month. Firms have moved to help oil and gas consumers eliminate carbon emissions, rather than withhold funds from them — a position that has been reinforced by a renewed focus on energy security in the absence of world oil and gas.
Environmental activists have argued that extracting oil and gas will make the world free, and that voluntary measures, such as those enforced by GFANZ, should be replaced by government regulations.
In his remarks on Monday, Mr. Carney said that donations are better than nothing, and the information provided by GFANZ members about the investments made by the companies they fund will promote transparency. Members who find membership requirements too strict or want to avoid public scrutiny of their climate programs are free to leave, he said. “But they are responsible for that.”