AllianceBernstein joins the Net-Zero Finance coalition

AllianceBernstein joins the Net-Zero Finance coalition

(Bloomberg) — AllianceBernstein Holding LP is among major investment firms adding its name to the world’s largest climate finance coalition as the COP27 summit in Egypt turns its attention to the role banks and managers are playing assets in the direction of capital towards a low carbon future.

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Northern Trust and Capital Group Inc. also joined the Net Zero Asset Managers initiative, a subunit of the Glasgow Financial Alliance for Net Zero, according to a statement on Wednesday. The news was timed to coincide with COP27’s Finance Day, which will be slimmer than in Scotland last year, after several prominent chief executives, including Larry Fink of BlackRock Inc. and Jane Fraser of Citigroup Inc., opted to stay away.

An energy crisis and a changing political landscape in the US are making it harder for banks and investors to turn their backs on fossil fuels. Financial firms are also increasingly nervous about the legal implications of joining net-zero alliances, with some in the US arguing that such goals conflict with fiduciary duties. And in some cases, climate finance alliances have even been likened to cartels.

Read more: Blackstone, Pimco Sidestep Net-Zero Group even after concessions

These legal risks may intensify depending on the outcome of the US midterm elections. Republican warnings that corporate ESG efforts could violate the nation’s antitrust laws are already prompting some companies to slow their climate efforts.

But there’s also a legal risk involved in making climate promises that companies don’t keep.

“These may be voluntary commitments, but they are commitments,” said Sonali Siriwardena, partner and global head of ESG at Simmons & Simmons in London. “Companies should therefore be wary of being caught up in the tide of unrealistic ambitions, as it can expose them to both litigation and reputational risks if they fail to deliver on these commitments.”

Meanwhile, there are more organizations policing climate pledges. A UN-appointed panel has set out a series of tests to determine whether zero pledges are genuine or “dishonest”. The panel of experts, appointed by UN Secretary-General Antonio Guterres and chaired by former Canadian environment minister Catherine McKenna, makes recommendations “to prevent net zero from being undermined by false claims, ambiguity and greenwash.”

In an attempt to satisfy the concerns of the financial industry, GFANZ recently allowed members to ignore a UN-backed group, Race to Zero, which had proposed binding restrictions on mineral finance. He also assured the signatories that the GFANZ sub-alliances “are subject only to their own governance structures”.

(GFANZ is co-chaired by former Bank of England Governor Mark Carney and Michael R. Bloomberg, founder of Bloomberg News parent Bloomberg LP.)

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Here are the latest developments. All seasons of Egypt.

Carney says regulations key to unlocking climate finance (9:27am)

The trillion

However, governments will play a key role in “unlocking” these funds, he said. Policymakers should “align fiscal regulation with net zero” by mandating net zero transition plans, “pricing carbon externalities” and “mobilizing capital in the emerging and developing world, ensuring that official funding flows in the private sector, private financing scale,” Carney said.

“The necessary private finance will be there to meet the government’s climate change commitments if they want it,” he said.

Africa Recognizes Need to Pursue Green Growth (8:43 am)

Africa’s common position at the COP27 summit recognizes the need for development alongside the task of providing electricity to its 600 million people who do not have access to energy, UN Economic Commission for Africa Executive Secretary Antonio Pedro said. This energy deficit is why the continent is promoting natural gas as a “transition fuel,” Pedro said in an interview with Bloomberg Television.

While pursuing so-called loss and damage — compensation from rich countries for damages sustained by developing countries due to global warming — Africa is also promoting investment in renewable energy, Pedro said. He cited as an example the Great Blue Wall Initiative, which aims to protect 2 million square kilometers of protected and conserved areas along the East African coast.

Affordable debt would be a success of COP27, says Egypt’s Maait (8:38 AM)

A world plagued by inflation, mounting debt and growing climate impacts needs development banks to step up, said Mohamed Maait, Egypt’s finance minister. “More funding at a reasonable cost and on reasonable terms,” ​​Maait said would be seen as a success at COP27.

Egypt, Norway to build 100MW green hydrogen plant in Red Sea (08:12 AM)

Egypt and Norway’s Scatec signed an agreement on the sidelines of climate talks in Sharm El Sheikh to launch the first phase of a project to build a green hydrogen plant in the Red Sea. The plant in Egypt will have a capacity of 100 megawatts.

Net-Zero Asset Managers Group says Alliance has grown to 291 (8:00am)

The Net Zero Asset Managers Initiative says 86 investors have set initial targets for the percentage of assets they will manage in line with achieving net zero emissions by 2050 or earlier, with the total number of asset managers committing to net zero to increases to 291.

That brings to 169 the total number of managers with such targets, representing a total of more than $55 trillion in assets under management, NZAMi said in a statement on Wednesday. New signatories include Capital Group, Northern Trust and AllianceBernstein.

Zimbabwe signs deal with SkyPower for 500MW solar plant (7:47am)

Zimbabwe has signed an agreement with SkyPower Global to build a 500 megawatt solar power plant, UN Economic Commission for Africa Executive Secretary Antonio Pedro said in an interview.

The agreement was signed at the COP27 summit being held in Sharm El Sheikh, he said, without elaborating.

World’s CO₂ hotspots identified by Al Gore-backed project (7:00am)

A consortium of dozens of research nonprofits on Wednesday launched a free online platform detailing global greenhouse gas emissions across 20 economic sectors.

Climate Trace, which can be viewed in a web browser, includes a zoomable world map that displays and ranks the dirtiest 72,000 power plants, oil refineries, airports, ships and more. The team used satellite imagery and machine learning as well as more conventional techniques to create what it says is the largest source of greenhouse gas emissions data available.

Climate change could cost Africa two-thirds of its GDP growth (02:01 am)

Global warming could cut Africa’s economic growth by two-thirds by the end of the century unless major investments are made in climate adaptation, a new study suggests.

Current climate policies will likely see temperatures exceed the pre-industrial average by 2.7 degrees Celsius, reducing Africa’s growth rates by 20% by 2050 and 64% by 2100, Christian Aid said in a report released on Wednesday. Even an increase in temperature of 1.5 degrees Celsius would reduce growth rates by 34% by the end of the century, it said.

While Africa is responsible for about 4% of the planet’s warming emissions, it has already been hit hard by a changing climate. Devastating cyclones and floods have hit southeast and west Africa this year, while the Horn of Africa is in the midst of its worst drought in four decades.

–With assistance from Salma El Wardany, Yousef Gamal El-Din, Paul Richardson, Mirette Magdy, Akshat Rathi and Siobhan Wagner.

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