GFANZ is The Glasgow Financial Alliance for Net Zero (gfanz), is a coalition co-chaired by Mark Carney, a former governor of the Bank of England. Its members, which include asset owners, asset managers, banks and insurers, have capital committed to over $130trn of assets to cut the emissions from their lending and investing to net zero by 2050. These commitments, from over 450 firms across 45 countries, can deliver the estimated $100 trillion of finance needed for net zero over the next three decades.
These firms - including banks, insurers, pension funds, asset managers, export credit agencies, stock exchanges, credit rating agencies, index providers and audit firms – have committed to high ambition, science-based targets, including achieving net zero emissions by 2050 at the latest, delivering their fair share of 50% emission reductions this decade, and reviewing their targets towards this every five years. All firms will report their progress and financed emissions annually.
They propose 4 ways to achieve net zero
- 1. Lending and investing
GFANZ - Financial institutions representing nearly $9trn in assets pledged to uproot deforestation from their investment portfolios.
By 2030, $4trn of investment will be needed each year to shift from fossil fuels to clean energy - a tripling of current levels. ($15t spent on Covid in 2 years )
Spending on fossil fuels must decline and spending on climate actionnneeds to increase
Non state-controlled firms account for only 14-32% of the world’s emissions.
State-controlled companies, such as Coal India or Saudi Aramco, the world’s biggest oil producer, are a big part of the problem and they do not operate under the sway of institutional fund managers and private-sector bankers.
And China and Russia are still to come to the party .
Their needs to be a coordinated approach to lending and finance by Governments and Private Enterprise - Globally - we all need to work together to solve this wicked problem
- 2. Measurement
What you can measure - you can manage
There needs to be a standard way to accurately assess the carbon footprint of a portfolio without double counting.
How should shareholders, lenders and insurers divvy up the emissions from a coal-fired power plant, for instance?
We have blockchain to do this
- 3. Incentives and great returns from Climate Action
How do you incentivise investors and innovators to stay away from fossils and invest in renewables .
Together, the five biggest American tech firms have a carbon intensity (emissions per unit of sales) of about 3% of the s&p500 average.
How can you prevent private equity to invest in assets such as oilfields and mines giving great returns - and encourage them to invest in renewables and green technologies have mediocre risk-adjusted returns.
How do you encourage venture capital into Climate Action - that is where the magic will happen
- 4. A price for Carbon
A standard price on Carbon - Carbon needs to be a tradable commodity - why not a BitCarbon
A price on Carbon will target everyone and align profit incentive to climate action .
- The players
Where Money goes - innovation flows
Inspired by https://www.economist.com/leaders/the-uses-and-abuses-of-green-finance/21806111
The uses and abuses of green finance from TheEconomist
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