Thread by @JeanneMartin25

43 banks from 23 countries on all continents have joined Mark Carney's Net Zero Banking Alliance, under the UNFCCC's "Race to Net Zero" campaign

A thread on the good, the bad, and the ugly of the alliance & the Net-Zero guidelines it published today 👇

unepfi.org/net-zero-banki…

Let's start with what's nowhere to be found within the Guidelines - despite being *pretty crucial* to any bank's climate strategy:

* Coal and fossil fuel phase out plans
* Biodiversity loss and deforestation
* Just Transition (although the SDGs are briefly mentioned)

Not requiring robust coal phase out plans is a missed opportunity in light of:

* The UK gvt's coal agenda (@PastCoal)

* Investors' expectations for the banking sector
iigcc.org/resource/inves… shareaction.org/shareholder-ca…

* Leading banks' coal policies (it's possible to do it guys!)

* Citizens and customers' expectations
bit.ly/3tEJ7gO

And of course the fact that coal and fossil fuels in general are a leading source of GHGs & that our planet is literally burning

What's good about the NZBA then?

* Banks "shall" disclose their financed emissions on an annual basis ✅

* Banks are mandated to use scenarios that "shall be" no-overshoot or low-overshoot (e.g. IPCC P1 & P2 scenarios) & have conservative assumptions on NETs 🔥

They "shall" also have "reasonable assumptions" on carbon sequestration achieved through nature-based solutions & land use change🌳

This will be subject to interpretation but is nevertheless an important recognition of the massive risk of relying on NETs

bit.ly/3sDE0w2

Banks are mandated to set 2030 & 2050 targets for the emissions embedded in their financing☀️

😱However😱

* The targets don't need to be aligned w 1.5C (the guidelines refer to "well-below 2C & striving for 1.5C")

* Only members of the #UNPRB have to get their targets verified

* The targets do *NOT* need to cover off-balance sheet activities such as underwriting

This. is. madness.

Major banks provide as much fossil fuel financing through underwriting as they do through lending.

* Banks have a total of 4 years to set targets & publish plans to back these up

I understand it is not easy. That methodologies don't always exist, data is missing, and things still need to be figured out. But *four* years!?

Many European banks have ***already*** set targets 😳

* Offsets are thought to have a role to play but preferably where "there are limited technological or financial alternatives to eliminate emissions"

⚠️This will be subject to interpretation w/o clear guidelines⚠️

They also do not *need* to be additional & certified

Many are likely to disagree - and I do speak from a European perspective - but I fear that the Net-Zero Banking Alliance is a missed opportunity to define climate leadership for the banking sector

As @PositiveMoneyUK told the FT this morning... 👇

“More voluntary alliances filled w repeat greenwashing offenders is not enough”

“We need urgent action from regulators (..) to ensure that the entire financial system is aligned with the legally binding environmental targets gvts have committed to”

ft.com/content/77a829… /END