Following a mass US exodus from the Net-Zero Banking Alliance a number of major UK financial institutions are being asked to vote on their future in the league.
Giants including HSBC and Barclays have been asked to decide on whether the group should ditch commitments to make sure $54trillion in assets are in keeping with the Paris agreement, which pledges to stop global warming at 1.5C above pre-industrial levels.
Launched by then-UN envoy Mark Carney, the organisation was established to support, enable and advocate for lower emission investments and other banking operations. Following the election of Donald Trump to US President, the group has lost 14 members – including Bank of America, Citigroup, Goldman Sachs, JPMorgan Chase, Morgan Stanley, and Wells Fargo.
The financial giants argue they cannot decarbonise faster than the economy itself, with a collective of European banks also threatening to walk if rules are not softened. Their proposal for loosening the requirements for membership was shared yesterday, Tuesday 11th March, with one spokesperson quoted in the Financial Times describing the situation as an ‘enormously depressing’ reaction to the sluggish speed of energy transition.
Under current rules, all banking activities must align with a route to keep global warming ‘well under’ 2C above pre-industrial levels, and as close to 1.5C as possible. Last year was the first on record to see temperatures across the world breach this limit, and the UN’s latest projections predict close to 3C of heating will take place by the end of this century. In January, a net zero asset managers’ alliance paused its activities after some of its biggest members, including BlackRock, quit the organisation. The equivalent body for the insurance industry also collapsed in 2023.
Image: Trevor Bittner / Unsplash
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