The world is facing an unprecedented challenge in the form of climate change. The Paris Agreement, adopted in 2015, aims to limit global warming to well below 2 degrees Celsius above pre-industrial levels, and pursue efforts to limit the temperature increase to 1.5 degrees Celsius. Achieving this goal requires a significant reduction in greenhouse gas emissions, including carbon dioxide, methane, and other pollutants, which are causing the planet to warm up.

The financial sector has a crucial role to play in this effort, as it provides the capital and investment needed to transition to a low-carbon economy. The Glasgow Financial Alliance for Net Zero (GFANZ) is a global coalition of financial institutions committed to achieving net-zero greenhouse gas emissions by 2050 or sooner. The alliance was launched in April 2021, and it represents a significant milestone in the efforts to address climate change.

This briefing paper provides an overview of GFANZ, its objectives, members, and activities, and discusses its significance in the context of the global efforts to address climate change.

The primary objective of GFANZ is to mobilize the financial sector to take action on climate change and work towards achieving net-zero greenhouse gas emissions by 2050 or sooner. To achieve this goal, the alliance has set out three key objectives:

1. Commitment to net-zero emissions: GFANZ members commit to reaching net-zero greenhouse gas emissions across their entire portfolios by 2050 or sooner. This involves setting science-based targets, which are aligned with the 1.5-degree Celsius temperature goal of the Paris Agreement.

2. Collaboration and knowledge-sharing: GFANZ aims to facilitate collaboration and knowledge-sharing among its members to accelerate the transition to a low-carbon economy. This includes sharing best practices, developing tools and methodologies, and engaging with policymakers and other stakeholders.

3. Transparency and accountability: GFANZ members commit to being transparent about their progress towards net-zero emissions and holding themselves accountable for their commitments. This involves regularly reporting on their emissions, disclosing their investment strategies, and engaging with stakeholders to ensure that their actions align with the goals of the Paris Agreement.

GFANZ is a coalition of financial institutions from around the world, including banks, asset managers, pension funds, and insurance companies. As of April 2021, the alliance had over 160 members with a combined asset value of over $70 trillion. Some of the notable members of GFANZ include:

1. BlackRock: The world's largest asset manager, with over $9 trillion in assets under management.

2. JPMorgan Chase: One of the largest banks in the United States, with assets of over $3.7 trillion.

3. Legal & General: A UK-based insurance and asset management company with over $1.5 trillion in assets under management.

4. UBS: A Swiss-based investment bank and wealth manager with assets of over $1.1 trillion.

5. Allianz: A German-based insurance and asset management company with over $2.7 trillion in assets under management.

GFANZ has several activities and initiatives aimed at achieving its objectives. Some of the notable activities of the alliance include:

1. Net-Zero Banking Alliance: GFANZ is a founding member of the Net-Zero Banking Alliance, which brings together over 50 banks from around the world committed to achieving net-zero emissions by 2050 or sooner.

2. Net-Zero Asset Owner Alliance: GFANZ is also a member of the Net-Zero Asset Owner Alliance, which represents a group of asset owners committed to achieving net-zero emissions across their portfolios by 2050.

3. Science-based targets: GFANZ is working with the Science Based Targets initiative to develop and promote the use of science-based targets among its members. Science-based targets are emissions reduction targets that are consistent with the level of decarbonization required to keep global warming below 1.5 degrees Celsius.

4. Climate scenarios: GFANZ is developing a set of climate scenarios to help its members better understand the risks and opportunities associated with the transition to a low-carbon economy. These scenarios will help financial institutions to assess the impact of climate change on their portfolios and develop strategies to manage these risks.

5. Engagement with policymakers: GFANZ is engaging with policymakers and other stakeholders to advocate for policies and regulations that support the transition to a low-carbon economy. This includes engaging with governments, multilateral organizations, and other stakeholders to promote the adoption of policies that incentivize investment in renewable energy, energy efficiency, and other low-carbon technologies.

6. Education and awareness: GFANZ is also focused on raising awareness and educating its members and the broader public about the risks and opportunities associated with climate change. This includes providing training and education to financial professionals on climate-related risks and opportunities, and developing tools and resources to help investors make informed decisions about climate-related risks.

The launch of GFANZ is a significant development in the efforts to address climate change. The financial sector has a crucial role to play in this effort, as it provides the capital and investment needed to transition to a low-carbon economy. GFANZ brings together some of the world's largest financial institutions, representing a combined asset value of over $70 trillion. This provides a powerful platform for collective action and collaboration on climate change.

GFANZ's commitment to achieving net-zero emissions across its members' portfolios by 2050 or sooner is also significant. This represents a significant acceleration in the pace of action on climate change by the financial sector. Achieving this goal will require significant investment in renewable energy, energy efficiency, and other low-carbon technologies. It will also require financial institutions to engage with policymakers and other stakeholders to advocate for policies and regulations that support the transition to a low-carbon economy.

The transparency and accountability commitments of GFANZ are also significant. Financial institutions that are members of GFANZ commit to being transparent about their progress towards net-zero emissions and holding themselves accountable for their commitments. This provides a powerful incentive for financial institutions to take action on climate change, as it ensures that their actions are being monitored and evaluated by stakeholders.

Finally, GFANZ's focus on collaboration and knowledge-sharing is also significant. The transition to a low-carbon economy is a complex and challenging task that requires collaboration and cooperation among a wide range of stakeholders. GFANZ provides a platform for financial institutions to share best practices, develop tools and methodologies, and engage with policymakers and other stakeholders to accelerate the transition to a low-carbon economy.

The Glasgow Financial Alliance for Net Zero represents a significant milestone in the efforts to address climate change. The financial sector has a crucial role to play in this effort, as it provides the capital and investment needed to transition to a low-carbon economy. GFANZ brings together some of the world's largest financial institutions, representing a combined asset value of over $70 trillion, to work towards achieving net-zero greenhouse gas emissions by 2050 or sooner.

One of the key features of GFANZ is its commitment to transparency and accountability. Financial institutions that are members of the alliance commit to disclosing their progress towards achieving net-zero emissions across their portfolios by 2050 or sooner. This includes disclosing their greenhouse gas emissions, their targets for emissions reductions, and their progress towards these targets. By making this information publicly available, GFANZ aims to create transparency and accountability for financial institutions in their efforts to address climate change.

The transparency and accountability commitments of GFANZ are important for several reasons. First, they create a level of transparency that can help to build trust among stakeholders. Financial institutions have a critical role to play in the transition to a low-carbon economy, but there has been a lack of trust in the financial sector's commitment to this goal. By disclosing their progress towards achieving net-zero emissions, financial institutions can demonstrate their commitment to addressing climate change and build trust among stakeholders.

Second, the transparency and accountability commitments of GFANZ can help to drive action on climate change. By publicly disclosing their progress towards net-zero emissions, financial institutions are holding themselves accountable for their commitments. This provides a powerful incentive for financial institutions to take action on climate change, as it ensures that their actions are being monitored and evaluated by stakeholders.

Finally, the transparency and accountability commitments of GFANZ can help to promote collaboration and knowledge-sharing among financial institutions. By making their progress towards net-zero emissions publicly available, financial institutions can learn from each other and share best practices. This can help to accelerate the transition to a low-carbon economy by promoting collaboration and cooperation among financial institutions.

In addition to its transparency and accountability commitments, GFANZ is also focused on collaboration and knowledge-sharing. The alliance brings together some of the world's largest financial institutions, representing a combined asset value of over $70 trillion. This provides a powerful platform for collective action and collaboration on climate change.

GFANZ's focus on collaboration and knowledge-sharing is important for several reasons. First, the transition to a low-carbon economy is a complex and challenging task that requires collaboration and cooperation among a wide range of stakeholders. Financial institutions can play a critical role in this effort by providing the capital and investment needed to transition to a low-carbon economy. By working together, financial institutions can share best practices, develop tools and methodologies, and engage with policymakers and other stakeholders to accelerate the transition to a low-carbon economy.

Second, collaboration and knowledge-sharing can help to drive innovation in the financial sector. As financial institutions work together to address climate change, they can develop new products and services that support the transition to a low-carbon economy. This can help to create new business opportunities and promote innovation in the financial sector.

Finally, collaboration and knowledge-sharing can help to promote collective action on climate change. By working together, financial institutions can advocate for policies and regulations that support the transition to a low-carbon economy. This can help to create a supportive policy environment for the transition to a low-carbon economy and accelerate progress towards the goal of net-zero emissions by 2050 or sooner.

In conclusion, the transparency and accountability commitments of GFANZ, as well as its focus on collaboration and knowledge-sharing, provide a powerful platform for collective action on climate change. By creating transparency and accountability for financial institutions in their efforts to address climate change, GFANZ aims to build trust among stakeholders and drive action on climate change. By promoting collaboration and knowledge-sharing, GFANZ aims to accelerate the transition to a low-carbon economy and promote innovation in the financial sector. Together, these efforts can help to achieve the goal of net-zero emissions by 2050 or sooner and contribute to a more sustainable future for all.