The committee has called for written evidence of insurance firms’ fossil fuel policies 

The parliamentary Environmental Audit Committee (EAC) this week (30 May) launched a new inquiry to examine the the financial sector’s net zero transition goals, including the insurance sector.

This role of financial institutions in de-carbonising the economy has been a key focus of the UK’s presidency of climate conference COP26, held in Glasgow during November 2021.

The committee is inviting written submissions that address any or all of the issues raised in the following terms of reference in relation to decarbonisation initiatives and their impact, by 5pm on 30 June 2022.

Written submissions have been requested on the subject of:

  • The firm’s fossil fuel policies
  • Comapany policies on investment in renewable energy technologies
  • Whether current geo-political events impact the firm’s view on the International Energy Agency’s (IEA) May 2021 conclusion that no new investment in fossil fuel initiatives is necessary to meet global energy needs if the IEA’s energy pathway for net zero by 2050 is followed.

In addition to this, the committee is writing to leading signatories to GFANZ headquartered in the UK or with substantial operations in the country.

Environmental audit committee chairman, Philip Dunne MP, said: “Mobilising financial institutions to support decarbonisation of the economy, for instance through the work of the Glasgow Financial Alliance for Net Zero (GFANZ), has been a key feature of the UK’s COP presidency.

“A year on from when Mark Carney launched the GFANZ initiative, our committee is keen to explore how this work can be most effective at driving down global emissions. Collectively, the alliance represents nearly 40% of global private financial assets and represents an enormous opportunity to influence meaningful action to cut emissions and support renewable energy generation.

“I encourage anyone with views on the role of private finance in decarbonising the economy to submit evidence to our committee.”

What is GFANZ?

GFANZ was launched by United Nations special envoy for climate action and finance, Mark Carney at US president Joe Biden’s climate summit back in April 2021. 

It provides a “practitioner-led forum for financial firms to collaborate on substantive, cross-cutting issues that will accelerate the alignment of financing activities with net zero and support efforts by all companies, organisations and countries to achieve the goals of the 2015 Paris Agreement”. 

By November 2021 this initiative had more than 450 financial firms from 45 countries, responsible for assets of over $130tn (£103tn), as members. GFANZ members now account for nearly 40% of total global private financial assets.

The firms that are represented all made commitments to “accelerating and main-streaming the de-carbonisation of the world economy and reaching net-zero emissions by 2050”.

The EAC considers initiatives like GFANZ as crucial in determining whether the UK government’s carbon budgets and its net zero targets will be met.