GFANZ Seeks “Rigour” on Transition Finance Strategies

New GFANZ consultation seeks feedback on a principles-based approach to the four key net zero financing strategies identified last year.

The Glasgow Financial Alliance for Net Zero (GFANZ) Secretariat has launched a consultation to better support financial institutions in assessing the impact of transition finance strategies on decarbonisation efforts.

Last year, GFANZ identified four strategies needed to finance a whole economy transition to net zero: the development and scaling of climate solutions, assets or companies already aligned to a 1.5°C pathway, assets or companies committed to transitioning in line with a 1.5°C pathway, and the accelerated managed phase-out of high-emitting physical assets.

The consultation, which is open to feedback until 2 November, is seeking market insight on a voluntary, pan-sector and globally applicable principles-based approach to these identified strategies, highlighting potential approaches to estimate the associated decarbonisation contribution impact.

Mary Schapiro, GFANZ Vice Chair, said: “Transforming the global economy to achieve net zero is the biggest challenge facing this generation. To move forward, we must apply more rigour to how we finance the transition and how that investment is truly driving decarbonisation over time – but we must do this thoughtfully and in broad consultation.”

Building on GFANZ’s transition plan guidance, the US Treasury has unveiled its Principles for Net Zero Financing and Investment for financial institutions at the Bloomberg Transition Finance Action Forum in New York City.

Read more articles like this on Regulation Asia’s sister publication, ESG Investor.

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