Businesses and financial institutions across the UK and Europe want all companies to be required to report their net zero emissions plans.
UK companies Aviva, BT Group and Tesco were among those with assets of up to $6.1 trillion that are asking the British government to get companies to disclose those carbon goals. The businesses are seeking mandatory disclosures from companies in the country regarding emissions goals to be made by 2025.
Additionally, Aviva is part of another group called the Glasgow Financial Alliance for Net Zero responsible for more than $90 trillion of assets across 40 countries. That group also is calling for leaders to build a net zero global financial system.
This action is being made ahead of next month’s UN Climate Change Conference, also known as COP26, in Glasgow, Scotland, in which the UK group says stricter standards in the country should be in place by that time. The UK businesses also want the government to provide guidance on what the carbon goals should look like.
The movement in the UK comes as the World Wildlife Fund for Nature recently released a report that the country’s businesses are lagging in their action plans. The report found that 19% of UK businesses have published detailed goals to hit net zero and nearly a quarter haven’t made any announcements on what their emissions objectives are.
The firms in the GFANZ are all a part of the UN’s Race to Zero and have committed to be net zero by 2050 and use science-based guidelines to reach net zero emissions and have goals set by 2030. The group was formed in April 2021 as part of the UN effort.
Regarding GFANZ, financial institutions are an important cog in moving the net zero transition, the group says.
“We need to unlock trillions of private finance to speed up the transition to net zero. It starts with policies that genuinely drive technology, innovation and finance in the right direction, including carbon pricing schemes and credible net zero plans,” says Group Chief Executive Officer of Aviva Amanda Blanc. “Private finance will only flow at scale when the cost of polluting is built into market prices.”
She says Aviva will stop investing in and insuring coal companies by 2022 unless they commit science-based targets, for example.
Financial institutions are playing a big role in encouraging businesses to make carbon goals. More than 1,600 businesses were recently asked to join the Science Based Target initiative as these efforts become more important to investors.
These efforts to increase business accountability with net zero efforts comes as the UN’s sustainable development goals also face huge funding gaps despite the financial industry investing a record $2.5 trillion in 2020. A Force for Good report says closing the gap could led to $12 trillion in business opportunities.