From UPSC perspective, the following things are important :
Prelims level: Net-Zero Banking Alliance (NZBA)
Why in the News?
Several major US banks have recently withdrawn from the Net-Zero Banking Alliance (NZBA), raising concerns about the banking sector’s commitment to combating climate change.
What is Net-Zero Banking Alliance (NZBA)?
- Established as a bank-led, UN-convened initiative, the NZBA commits members to align their lending, investment, and capital market activities with achieving net-zero greenhouse gas (GHG) emissions by 2050.
- It is a part of the UNEP Financial Initiative’s Principles for Responsible Banking, serving as a climate accelerator.
- NZBA retains 142 members from 44 countries, with 80 European banks representing the majority of the alliance’s $64 trillion in assets.
- No Indian banks are signatory to this NZBA.
- Structural Mandate:
- Overseen by a Steering Group representing diverse geographies and business models.
- Supported by the UNEP FI Secretariat and governed under documents updated in August 2023 and March 2024.
- Commitments of Member Banks:
- Transition operational and portfolio emissions to align with net-zero pathways.
- Set 2030 targets (or sooner) within 18 months of joining and establish intermediate targets every five years.
- Publish annual reports on absolute emissions and emissions intensity.
What is the Net-Zero Greenhouse Gas (GHG) Emissions Target by 2050?
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About the Glasgow Financial Alliance for Net Zero (GFANZ)
- The GFANZ is a global coalition of leading financial institutions committed to accelerating the transition to a net-zero economy and achieving net-zero GHG emissions by 2050.
- It was established in April 2021 in the lead-up to the COP26 climate summit in Glasgow.
- Membership comprises over 550 financial institutions across 50 countries.
- Includes banks, insurers, asset managers, and other financial players managing a combined $150 trillion in assets.
- It is chaired by Mark Carney, former Governor of the Bank of England and current UN Special Envoy for Climate Action and Finance.
- It is supported by global initiatives like the UN Race to Zero campaign and other financial alliances.
PYQ:[2016] The term ‘Intended Nationally Determined Contributions’ is sometimes seen in the news in the context of: (a) Pledges made by the European countries to rehabilitate refugees from the war-affected Middle East. (b) Plan of action outlined by the countries of the world to combat climate change. (c) Capital contributed by the member countries in the establishment of the Asian Infrastructure Investment Bank. (d) Plan of action outlined by the countries of the world regarding Sustainable Development Goals. |
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