MPs have launched an inquiry to explore the role of the financial sector in helping the UK achieve its net zero goals.
The Environmental Audit Committee (EAC) believes financial institutions in the UK could play a potentially pivotal role in supporting reductions in fossil fuel extraction.
The Glasgow Financial Alliance for Net Zero (GFANZ) was launched in April 2021 last year and by November 2021, it had more than 450 financial firms from 45 countries, responsible for assets of more than $130 trillion (£103tn) , as members.
GFANZ members now account for nearly 40% of total global private financial assets.
The firms made commitments to “accelerating and mainstreaming the decarbonisation of the world economy and reaching net zero emissions by 2050”.
Given the global reach and total assets covered by GFANZ initiatives, the EAC considers such initiatives could be crucial in determining whether the UK Government’s carbon budgets and net zero targets are likely to be met.
The EAC is writing to leading GFANZ signatories with headquarters in the UK or have substantial operations here to provide public statements on their fossil fuel policies, policies on investment in renewable energy technologies and whether current geo-political events impact their view on the International Energy Agency’s May 2021 conclusion that no new investment in fossil fuel initiatives is necessary to meet global energy needs.
It is also calling on interested parties to give their views on the inquiry by 30th June 2022.
EAC Chair Philip Dunne MP said: “Mobilising financial institutions to support decarbonisation of the economy, for instance through the work of the Glasgow Financial Alliance for Net Zero, has been a key feature of the UK’s COP Presidency. A year on from when Mark Carney launched the GFANZ initiative, our Committee is keen to explore how this work can be most effective at driving down global emissions. Collectively, the alliance represents nearly 40% of global private financial assets, and represents an enormous opportunity to influence meaningful action to cut emissions and support renewable energy generation.
“I encourage anyone with views on the role of private finance in decarbonising the economy to submit evidence to our Committee.”