Back a more flexible temperature target for members
Over 80% of members voted; 90% of votes cast in favour
Comes as real economy, policy and technology lag on climate ambition
LONDON, April 15 (Reuters) – The world’s leading bank coalition looking to help tackle climate change has voted to ditch some of its more stringent membership rules to better reflect the slow pace of change in the real economy, its chair told Reuters.
The UN-backed Net Zero Banking Alliance has been canvassing members over changes to its rules amid the withdrawal of some of the coalition’s biggest banks and as the United States leads calls to abandon climate action in the financial sector.
Banks voted to abandon a more stringent target to align all sector financing with 1.5 degrees Celsius above the pre-industrial average by mid-century and replace it with a more flexible ambition to align their businesses with a well-below 2 degrees target, albeit striving for 1.5 degrees.
The changes reflect recognition that the real economy is falling short in its transition to be more sustainable while policy making and technology advances have not happened at the rate predicted when banks and asset managers first came together to declare collective action for climate at COP26 in Glasgow.
“The knowledge we had in 2021 on what was achievable … has been very different than where we are today,” Shargiil Bashir, Chief Sustainability Officer and Executive Vice President at First Abu Dhabi Bank said.
“Some of the industries are not transitioning as we expected four years ago because either the technology is not moving as fast or the policymaking is not moving as fast,” he said naming housing and aviation as examples.
Over 100 of the groups member banks have already set 1.5 degree aligned sector targets, but the group wants to attract banks in countries which are not aligned to 1.5 degrees to bolster its numbers.
The overhaul reflects NZBA’s next phase as it moves from primarily a target-setting organisation to one which helps banks implement those changes through webinars, sectoral papers and other capacity-building activities, Bashir said.
Options to be discussed include how the financial industry can use different methods of accounting for calculating or reducing planetary warming emissions such as avoided emissions or carbon markets, Bashir said.
Over 80% of NZBA members voted while 90% of the votes cast were in favour of the proposals. (Reporting by Virginia Furness; Editing by Stephen Coates)
