The Glasgow Financial Alliance for Net Zero (GFANZ), a UN-backed coalition of financial institutions, has announced a significant restructuring aimed at accelerating the mobilization of capital for the low-carbon transition. The revamped framework will now welcome participation from any financial institution working towards climate goals, regardless of formal net-zero commitments.

This move comes in the wake of notable departures from GFANZ-affiliated coalitions, including leading U.S. banks such as Citi, Bank of America, and Goldman Sachs, citing pressure from anti-ESG political campaigns in the U.S. and concerns over legal risks.

Founded in 2021 and spearheaded by Mark Carney, Michael Bloomberg, and Mary Schapiro, GFANZ initially unified several net-zero coalitions under its umbrella. However, the past year has seen challenges, including the disbanding of the Net Zero Insurance Alliance and mounting scrutiny on ESG alliances.

Key Updates in the Restructuring:

Inclusive Membership: Institutions no longer need to belong to specific net-zero coalitions or make binding net-zero commitments to join GFANZ.
Focus on Capital Mobilization: GFANZ will work on dismantling barriers to financing energy transitions, emphasizing a $5 trillion annual opportunity in modernizing energy systems globally, especially in emerging markets and developing countries (EMDCs).
Public-Private Partnerships: The organization aims to foster collaborations with governments, multilateral development banks (MDBs), and private financiers to scale investments.
New Initiatives: These include partnering on industrial decarbonization, enhancing voluntary carbon markets, and supporting climate finance tools through MDBs.

GFANZ has touted its early achievements in shaping climate finance frameworks, such as advancing climate disclosure and risk management tools. In its statement, GFANZ reiterated its commitment to addressing financial challenges and seizing opportunities for a sustainable future.

“GFANZ’s new structure will ensure that financial institutions can contribute effectively to the transition while addressing urgent barriers,” a GFANZ spokesperson emphasized.