UN PRI exec: GFANZ needs ‘repositioning’
Conflicts between zero aims of institutions and the interests of their clients pose a challenge to net zero targets, PRI's CRO said at an industry event
The Glasgow Financial Alliance for Net Zero (GFANZ) will require "careful repositioning" amid ongoing challenges, according to Nathan Fabian, chief responsible investment officer at the UN Principles for Responsible Investment (UN PRI).
Speaking at the Oxford Sustainable Finance Summit, Fabian addressed the recent departures from GFANZ.
He acknowledged that asset managers represent a multitude of interests: “The idea that a manager of corporate ownership, who serves millions of different individuals, can set its own 2050 target, and basically implement that, supposedly on somebody's behalf was frankly never going to work, but that doesn't mean that they're not absolutely essential to the transition."
But he also emphasised that this was not an argument against investors joining efforts on climate change: "Collaboration is essential, it is the best lever. If you're not yet participating in a collaborative initiative getting into one is the absolute best thing to do."
The debate took place against the context of GFANZ having faced a series of senior exits, particularly from the Net Zero Insurance Alliance, which has faced the departure of firms including Axa, Allianz, Munich Re and Swiss Re. Insurers who left the collaboration cited the threat of potential US anti trust lawsuits as a key reason.
The Net Zero Insurance Alliance disclosed earlier this month that it has dropped requirements for members to publish greenhouse gas emission reduction targets.
But Fabian, who has also acted as a member of the European Commission's technical expert group on sustainable finance, still sees a future for GFANZ, if it can reinvent itself.
“Why shouldn't GFANZ have a job of assessing and transparently disclosing all of the investment [net zero] aligned goals, all the investments holding back the goals, and then engaging the base while disclosing both net contribution and harm?
“Does this mean that we throw away GFANZ? No, it doesn't. But it's clearly going to have a very careful repositioning and clarification of what it is meant to do” he concluded.
