GFANZ unveils framework for transitioning companies

30 September 2022

The Glasgow Financial Alliance for Net Zero (GFANZ) has released a new report on transition plan disclosure for real-economy companies, making a case for clarity surrounding “critical components” needed to disclose transition strategies by companies

The report leverages existing transition plan disclosure frameworks to help real-economy companies navigate disclosure requests from financial institutions.

GFANZ says it hopes to bring much-needed consistency, clarity, and a global economy-wide view on the information and metrics financial institutions require to assess the credibility of plans.

It is estimated that just 30% of companies disclosing climate-related data to CDP are developing a low-carbon transition plan and only 1% of these companies reported all key indicators associated with a credible transition plan.

Read more about Minerva's own involvement with GFANZ:

https://www.old.manifest.co.uk/minerva-founding-member-of-net-zero-alliance/

Mary Schapiro, vice chair at GFANZ said: “A global net-zero economy transition requires financial institutions and real-economy firms to work from a common set of expectations. Ensuring companies know what financial institutions deem credible underpins the essential work driving emissions reductions.

“GFANZ is providing the blueprint for the real economy to transform net-zero commitments into a business-aligned decarbonization strategy,” she added.

It is hoped the blueprint within the report can be used by companies to understand the information and data that global financial institutions will use to evaluate the credibility of their net-zero strategies.

Thomas Buberl, CEO at AXA, said: “The financial sector is a connector across industries. Together with real-economy companies, we must work together to strengthen our common ambition for climate action and to progress towards net zero. This new guidance will ensure we’re working together every step of the way.”

The report is the most recent in a series of guiding resources by GFANZ meant to support convergence in the development of a global regulatory framework.

The alliance, which represents over 500 member firms from across the financial sector in 45 countries, has come under scrutiny after the UN’s Race to Zero campaign tightened its criteria. GFANZ is yet to instruct its members to comply with the updated requirements, despite calls from industry voices.