(Monday 24th October) Today, the Environmental Audit Committee questioned Mark Carney on the Glasgow Financial Alliance for Net-Zero's (GFANZ) progress on its climate commitments.
In July, ShareAction submitted written evidence for the inquiry, including key focus areas for MPs' questioning, such as the current rates of fossil fuel finance that threaten a 1.5C scenario, the lack of an accountability mechanism in GFANZ, and the need for more robust government regulation.
Isabella Salkeld, Senior Policy Officer at ShareAction, commented: "We were pleased to see several cross-party MPs call for more scrutiny where GFANZ members are seen to finance fossil fuel expansion, or projects which lead to deforestation. Last year the 44 largest members of the Net-Zero Banking Alliance provided $143.6 billion in lending and underwriting for the 75 companies doing the most to expand oil and gas.
On the one hand, Carney acknowledged that there are 'policy gaps', but on the other, he argued that voluntary initiatives are the best way to 'test out' future mandatory policies, as we've seen with the Task Force on Climate-Related Financial Disclosures and incoming transition plans.
Given the urgency of the climate crisis, the UK government needs to step up regulation of financial institutions, many of which are GFANZ members, and their progress immediately, rather than waiting to adopt measures trialled by voluntary initiatives. There's an opportunity to include green finance considerations into the upcoming Financial Services and Markets Bill, and to embed climate safeguards in the Treasury's Solvency II review governing the insurance industry.”