The Glasgow Financial Alliance for Net Zero (GFANZ), a coalition of financial institutions formed to accelerate the global transition to a low-carbon economy, has announced a major restructuring aimed at broadening its scope and addressing barriers to climate finance mobilization. Established in April 2021 and launched at the COP26 climate conference, GFANZ originally united leading net zero coalitions across the financial industry, from banks to asset managers and insurers, into a shared commitment to align portfolios with net-zero emissions by 2050.
The restructuring comes in the wake of several high-profile exits from GFANZ-affiliated coalitions, including the Net Zero Banking Alliance (NZBA), following recent losses of major U.S. banks such as Citi, Bank of America, and Goldman Sachs. These exits point out the challenges for financial institutions being targeted by anti-ESG political campaigns, especially in the U.S. where Republican legislators have threatened the banks and other institutions with lawsuits over their participation in climate-focused alliances. These pressures ended in the breakup of the Net Zero Insurance Alliance (NZIA) in 2024, after several of its members announced their withdrawal from the alliance.
Membership in GFANZ previously involved participation in one of its sector-specific coalitions, each of which had imposed net zero commitments. For example, the NZAM required asset managers to align their portfolios with net zero emissions by 2050, while the NZBA focused on transitioning lending and investment portfolios to support net zero pathways. However, the newly announced changes remove this requirement, making GFANZ accessible to any financial institution that is dedicated to promoting capital mobilization for the energy transition, regardless of whether it is a member of a net zero coalition.
According to an ESG Today report, a GFANZ spokesperson said that the coalition has moved toward being more inclusive and added, “GFANZ will work with firms that support the aim of mobilising capital for the transition.”. Membership in one of the sector alliances is not required to participate.” The restructuring is seen as a strategic pivot to focus on enabling large-scale financing for decarbonization, particularly in emerging markets and developing countries (EMDCs), where the opportunities to modernize energy systems and transition to low-carbon economies are estimated at over $5 trillion annually in the coming decade.
Updated priorities for GFANZ include developing public-private partnerships to ensure the private sector plays a role, along with governments and MDBs. The coalition will also develop tools to scale private finance mobilization, support industrial decarbonization through its Industrial Transition Accelerator initiative, and enhance the integrity of voluntary carbon markets by addressing investment barriers.
The announcement marks a change in GFANZ’s strategy following its early successes, such as promoting climate-related disclosures, developing climate transition plans, and facilitating private investment into high-risk markets. The move beyond sector-specific alliances is now aimed at systematically addressing systemic barriers to climate finance at a global scale.
The restructuring retains GFANZ’s leadership under its co-chairs, former Bank of England and Bank of Canada Governor Mark Carney and Bloomberg LP founder Michael Bloomberg, and Vice Chair Mary Schapiro, former Chair of the U.S. Securities and Exchange Commission (SEC). The Principals Group, composed of CEOs from leading financial institutions, including some firms that have left net zero coalitions, such as Citi and Bank of America, will continue to guide the strategic direction of the coalition.
GFANZ’s new mission statement reflects its conviction that it is both necessary and possible to overcome the obstacles to mobilizing climate finance. In its declaration, the coalition reaffirmed its commitment to support financial institutions around the world in their efforts to address these challenges and seize the opportunities of the transition to a sustainable economy. GFANZ aims to accelerate the deployment of the capital needed to achieve net-zero emissions globally by focusing on collaborative efforts and innovative financial mechanisms.