LONDON – Banks will have to immediately stop providing capital market services that help finance new fossil fuel projects if they want their net-zero plans approved, according to long-awaited consultation papers by the leading verification organisation.
The finance industry’s capital allocation is nowhere near what’s needed to limit global warming to the critical threshold of 1.5 deg C, with capital market operations a particular point of contention. Disagreement inside the industry has for months blocked efforts to reach an agreement on how to calculate the carbon footprints of bond and equity underwriting businesses.
The finance industry has been quick to commit to net-zero goals, but has tended to provide limited detail on how it will achieve that target. And sincethe world’s 60 biggest banks have provided almost US$5.5 trillion in financing to fossil fuel companies, according to an April report by a group of non-profit organisations.