· 3 min read
illuminem summarises for you the essential news of the day. Read the full piece on Responsible Investor or enjoy below:
🗞️ Driving the news: The Net-Zero Banking Alliance (NZBA) is set to vote on a proposal to adjust its commitment from aligning with the 1.5°C global warming target to the broader Paris Agreement goal of keeping warming "well below 2°C" while pursuing efforts for 1.5°C
• This shift aims to address challenges faced by member banks in meeting stringent climate targets amidst varying national policies and economic realities
🔭 The context: Established under the UN's Race to Zero campaign, the NZBA comprises over 130 banks representing more than $70 trillion in assets, all pledging to align their lending and investment portfolios with net-zero emissions by 2050
• However, recent political shifts, notably in the U.S., have led to the departure of major banks, prompting the alliance to reconsider its stringent 1.5°C alignment to retain and attract members globally
🌍 Why it matters for the planet: Adjusting the NZBA's target could have significant implications for global climate efforts
• While it may enhance inclusivity and feasibility for banks operating in diverse economic contexts, there's concern that relaxing commitments could dilute the financial sector's role in driving urgent climate action
• Balancing ambition with practicality remains crucial to ensure that financial institutions contribute effectively to limiting global warming
⏭️ What's next: The NZBA members are expected to vote on the proposed target adjustment later this month
• The outcome will likely influence the alliance's composition and its approach to supporting members in achieving climate goals
• Additionally, this decision may set a precedent for other financial alliances grappling with similar challenges, potentially reshaping the landscape of climate commitments in the banking sector
💬 One quote: "The proposal loosening the membership requirement was expected to be shared with members on Tuesday ahead of a voting process that will begin later this month," according to sources familiar with the matter
📈 One stat: The NZBA's membership represents over $70 trillion in assets, underscoring the significant influence of its climate commitments on global financial flows
See here detailed sustainability performance of companies like HSBC, Barclays, and JPMorgan Chase
Click for more news covering the latest on net zero
