Banking Alliance Reforms to Tackle Carbon Emissions
The Net-Zero Banking Alliance will shift from a 'membership-based alliance' to a 'framework initiative' following the exit of major banks. This move aims to maintain relevance and support banks' resilience in achieving net-zero emissions amidst pressure and challenges around antitrust rules.
The Net-Zero Banking Alliance, formed ahead of the 2021 climate talks in Glasgow, plans a structural overhaul after many major banks exited under political pressure. The group aims to transition from a 'membership-based alliance' to a 'framework initiative', a move to sustain its mission of reducing carbon emissions within the banking industry.
Previously, banks in the alliance were committed to net-zero emissions by 2050, interim targets for 2030, and annual reports. Departures happened amid concerns from U.S. Republican politicians about the potential violation of antitrust rules. Prominent exits include UBS, alongside Barclays, HSBC, and others from the U.S., Canada, Australia, and Japan.
In response, the alliance contends this pivot aims to bolster banks' capacity to support the transition aligned with the Paris Agreement. However, critics like Lucie Pinson argue this highlights the inadequacy of voluntary commitments and stresses the need for stringent regulatory measures.
(With inputs from agencies.)
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