Two years of GFANZ – what’s next?
What can we expect from 2023 when it comes to banks’ portfolio decarbonization activities and strategies? We are trying to find the answers through a number of initiatives within our Qorus Sustainability & Regulation Community, created together with TNP Consultants as a partner. One of them is the event ‘Two years of GFANZ – what’s next?’, which took place on 9 March.
What can we expect from 2023 when it comes to banks’ portfolio decarbonization activities and strategies?
We are trying to find the answers through a number of initiatives within our Qorus Sustainability & Regulation Community, created together with TNP Consultants as a partner. One of them is the event ‘Two years of GFANZ – what’s next?’, which took place on 9 March.
Representing more than 550 global financial institutions that have committed to fully decarbonizing their portfolios by 2050, the Glasgow Financial Alliance for Net Zero (GFANZ) celebrates its second birthday in April 2023. A lot has changed thanks to GFANZ’s strong presence and awareness creation since its founding in April 2021: attention to banks’ financed emissions and net zero strategy is no longer a nice-to-have, but it is becoming more and more business as usual.
The event was kicked off by Peter Plochan, the community’s senior advisor and Global Climate & Risk Trainer and EMEA Principal Risk Management Advisor at SAS Institute, who started by exploring the risk, opportunity and greenwashing angle of climate change and their relevance for delivering the net zero transition, decarbonizing banks’ portfolios in the most efficient way while still making some decent profit.
Peter also shared couple of relevant quotes from the leading climate risk and net zero practitioner banks around the tremendous opportunities and work for banks that lie ahead connected to portfolio decarbonization and the new sustainable revenue markets.
Going forward, as we think of decarbonization, we should keep in mind all these perspectives: the risk, the opportunity, the extra work and the greenwashing angle.
We had outstanding speakers and panellists sharing their perspectives during the event:
• David Carlin, Head of Climate Risk and TCFD at UNEP FI
• Vera Economou, ESG Group Competence Center Lead, Raiffeisen Bank International
• Ru Pearce, Co-founder of Rewired.Earth
• Tjeerd Krumpelman, Global Head of Advisory, Reporting & Engagement (Group Sustainability) from ABN Amro.
All of them, having exceptional experience in the banking and sustainability field, brought real case studies and concrete examples of how they are addressing decarbonization and working with GFANZ recommendations, and talked through where they think the potential opportunities are in this space.
In his keynote speech, David Carlin, Head of Climate Risk and TCFD at UNEP FI, shared his perspectives on the global outlook and trends of climate risk and net zero.
"Decarbonization is like walking a steep path – but the path was not built yet and green finance is the way to build that path," he said.
David highlighted three major elements that will influence and determine the next steps for banks and their portfolio decarbonization activities, and elaborated the important role of GFANZ in shaping these:
1. Formalization of commitments
• target setting guidance
• target setting protocols for different industries
2. Operationalization of those commitments
• emergence and development of transition plans
• guidance on how transition plan should look (measurable and monitorable)
• transition plans should be living documents
3. Financial and regulatory scrutiny
• addressing greenwashing concerns
• mandatory transition plan disclosures
Vera Economou, ESG Group Competence Center Lead, underlined best practices of Raiffeisen Bank International as a sustainable finance leader in Austria and CEE when it comes to carbon footprint calculation and management, focusing on how not just to turn away from polluting customers but on how to engage them in the net zero journey.
“We clearly see this as a historical moment when sustainable development goes from nice-to-have to a must-have if you want to be successful,” she said.
Rupert Pierce shared experiences with his organization’s global sustainability tool Rewired.Earth which helps firms to address sustainability data challenges. He focused on the importance of demand data in rewarding businesses for doing the right thing, and driving sustainable change more quickly and effectively.
During the event we also collected via poll survey valuable perspectives from the online participants on whether they see net zero becoming mandatory. Clearly the audience was convinced that mandatory decarbonization is just a question of time.
In the subsequent panel discussion, our experts reflected on the presentations and the poll results and shared their perspectives on different aspects of decarbonization.
“Offloading and avoiding carbon intensive customers is not the solution for our planet, we should rather focus helping our customers with transition,” said Tjeerd Krumpelman, Global Head of Advisory, Group Sustainability at ABN AMRO.
In particular we asked our experts to share their views on the areas below:
• Why does it make sense for banks to join GFANZ even in the current very volatile, uncertain and risky environment for banks?
• Why should banks focus more on transition of their carbon intensive customers rather than on their offloading and avoidance?
• Why should we forget about climate specific strategy and rather focus on integrating climate into our ‘business as usual’ strategy?
• What magic net zero and sustainability wish would our experts like to have granted to make their work and life easier?
All the discussions, answers to the questions above and shared insights from our experts are available to watch on demand in the event’s recording.
To make sure you do not miss any of our upcoming related events and materials, please register as a member of our Sustainability & Regulations Community.
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