Mark Carney acknowledged that banks opposed his financial alliance to fight climate change because they feared complying with the rules on lending to fossil fuel companies would expose them to legal claims.
Wall Street banks including JPMorgan, Morgan Stanley and Bank of America are among those who have threatened to leave the group, first reported by the Financial Times.
The former Bank of England governor said on Wednesday the so-called lending guidelines may have “gone too far” and have been amended to address banks’ concerns about tough targets for phasing out coal, oil and gas, set by the Race to Zero campaign, a United Nations-led organization for net-zero emissions standards that recognizes Alliance pledges.
Asked about the development at a New York Climate Week event, Carney said that while there would be “differences,” banks need guidance to help them “manage the phase-out of high-emission coal and fossil fuels responsibly.” .
“What they can’t have are legally binding restrictions — a thing called antitrust laws — which are binding in some of these jurisdictions. There were some guidelines, if you will, or restrictions issued by Race to Zero earlier this summer that went too far. Clarifications have been issued,” he said at a forum organized by the UN and Michael Bloomberg, co-founder of the Glasgow Financial Alliance for Net Zero.
The Race to Zero wording change removed an explicit ban on supporting new coal. It now states that banks should phase out their “development, financing and promotion of new undiminished fossil fuels, including coal, in accordance with appropriate global, science-based scenarios”.
In defense of the effort launched at last year’s UN climate summit to tout $130 trillion in assets and commit as Gfanz, Carney said there needs to be a global set of standards. “We need a global system that works in Manhattan and Malawi.”
Pressure mounts on Malpass to leave the World Bank
World Bank Group President David Malpass has faced increasing pressure to leave the international financial institution after avoiding directly answering questions about whether he believes in the science of climate change.
When asked if he believed in man-made global warming at a panel discussion on Tuesday, Malpass repeatedly avoided a direct answer, finally say that he is “not a scientist”.
Earlier Tuesday, former Vice President Al Gore called on Malpass to resign, calling him a climate denier.
Carney also resigned from Malpass on Wednesday when asked about his stance on the group’s leader not acknowledging the cause of global warming.
“I’m not a scientist, but I take scientific advice,” Carney replied.
“And I’m not a poverty expert, I know the responsibility of the World Bank and world poverty, an essential part of ending world poverty is providing the global public goods necessary to address deforestation and climate change more broadly.”
Amazon signs energy contracts to deal with emissions
E-commerce group Amazon said it has signed agreements with 71 renewable energy projects to meet its goal of running all operations on clean energy by 2025 while trying to curb emissions that have grown with its sales .
The company has achieved 85 percent renewable energy coverage across its business by the end of 2021, it said. This compares to his stated goal of 100 percent by 2025 that founder Jeff Bezos announced last year.
Amazon’s absolute carbon emissions rose 18 percent year-on-year in 2021 as online orders surged during the coronavirus pandemic lockdown.
The company purchase agreements will provide renewable energy for the company’s offices, fulfillment centers and data centers. Financial details were not disclosed.
Amazon said investing in the 71 new projects around the world, including in Brazil, India and Poland, would add a total of 2.7 gigawatts of clean energy to its renewable energy portfolio, bringing the total to 18.5 gigawatts in 21 countries would bring. For comparison, the US added 19.6 gigawatts of solar capacity in 2021, corresponding the International Renewable Energy Agency.
Bezos has also pledged $10 billion of his estimated $148 billion fortune to the Bezos Earth Fund to help fight climate change this decade.
Investor groups raise concerns about UK climate policy under Truss
In the UK, where green groups have raised concerns about the new Prime Minister’s commitment to action on climate change, the chief executives of three investor groups wrote to Liz Truss on Wednesday, asking her to uphold the government’s commitment to achieving net zero .
The heads of the Institutional Investors Group on Climate Change, the Principles for Responsible Investment and the UK Sustainable Investment and Finance Association said it was “vital and in the UK’s national and economic interest” to keep the momentum on decarbonisation going. A clear policy framework and “a clear implementation plan for the transition of the real economy and financial services” are needed, they said.
Drax aims to provide credits from carbon capture
British energy group Drax said it was working on a deal with Respira International to supply the carbon finance group with 2 million “carbon dioxide removals” to be used by buyers to offset their emissions to reposition themselves as clean energy dominators.
Drax generates energy by burning woody biomass, a controversial fuel source. It said it would generate the “distances” over five years by adding carbon capture technology to its biomass incinerators in North America. The company said it had not yet decided which carbon credit standards body it would work with to validate the certificates.
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