In news– A recent analysis comparing industry pledges to climate action by the France-based group Reclaim Finance shows banks and financial institutions, a part of the GFANZ initiative, continue to invest billions in fossil fuels.
What is GFANZ?
- It is a global coalition of leading financial institutions committed to accelerating the decarbonization of the economy.
- GFANZ was launched in April 2021 by the UN Special Envoy on Climate Action and Finance and the COP26 presidency, in partnership with the UNFCCC Race to Zero campaign, to coordinate efforts across all sectors of the financial system to accelerate the transition to a net-zero global economy.
- Achieving the objective of the Paris Agreement to limit global temperature increases to 1.5°C from pre-industrial levels requires a whole economic transition.
- Every company, bank, insurer, and investor will need to adjust their business models, develop credible plans for the transition to a low-carbon, climate-resilient future, and then implement those plans.
- It provides the tools and resources the financial sector needs to implement its net-zero commitments.
- It estimates a requirement of USD 100 trillion of finance for global net zero by 2050.
- It was founded for two equally important purposes:
- To expand the number of net zero-committed financial institutions and
- To establish a forum for addressing sector-wide challenges associated with the net-zero transition, helping to ensure high levels of ambition are met with credible action.
- GFANZ brings together independent, sector-specific alliances to tackle net-zero transition challenges and connects the financial community to the Race to Zero campaign, climate scientists and experts, and civil society.
What is Net zero?
- Net zero refers to a state in which the greenhouse gases going into the atmosphere are balanced by removal out of the atmosphere.
- The term net zero is important because – for CO2 at least – this is the state at which global warming stops. The Paris Agreement underlines the need for net zero.
- It requires states to ‘achieve a balance between anthropogenic emissions by sources and removals by sinks of greenhouse gases in the second half of this century’.
Further reading: https://journalsofindia.com/outcomes-of-cop26-summit/
Source: News
