A coalition of financial firms led by former Bank of England governor Mark Carney that aims to tackle climate change said on Thursday it has dropped a requirement for its members to sign up to a United Nations emissions reduction campaign.
The move drew criticism from climate activists worried it would ease pressure to act on the banks, insurers and asset managers signed up to the Glasgow Financial Alliance for Net Zero (GFANZ), a group which in total accounts for assets worth some $153 trillion.
GFANZ includes groups of companies organised by sector, each previously required to partner with Race to Zero, a U.N.-backed campaign aimed at securing bigger commitments to cut greenhouse gas emissions.
Race to Zero members agree to "phase out development, financing and facilitation of new unabated fossil fuel assets, including coal," in line with science-based scenarios. Environmental advocates are concerned that GFANZ members won't be held to that standard or others without their commitment to Race to Zero.
The change comes amid tensions between GFANZ and Wall Street firms over how far they should go in their climate commitments.
"Clearly they are giving in to their Wall Street members who have been reported as threatening to quit the alliance if they are expected to actually pull back on their finance for fossil fuels," said Paddy McCully, senior analyst at non-governmental organization Reclaim Finance.
GFANZ said in a statement that from now, "member alliances are encouraged, but not required, to partner with the Race to Zero".
The decision was driven by a need to be more flexible in highly-regulated financial industries in 50 jurisdictions, it said.
GFANZ said its affiliation with the United Nations will continue. United Nations climate chief Simon Stiell will join a group responsible for setting its strategy and priorities, and monitoring progress, GFANZ added.
(Reporting by Isla Binnie in New York and Ross Kerber in Boston; editing by Richard Pullin)
