A letter to all major global banks signed by major green groups titled “Principles for Paris-Aligned Financial Institutions” ahead of Climate Week. The focuses are climate impact, fossil fuels and deforestation.
'Paris Principles' document lays out steps needed to transform finance commitments into action
Pressure To Commit To Long Term Climate Goals
The world’s biggest banks, insurers and money managers are under pressure from the public, politicians and their shareholders to commit to long term climate goals. Some have already affirmed that they will align their financing with the 2015 Paris Agreement and its goal of a 1.5 degree Celsius cap on climate change. Many more announcements of this type are likely to follow over the coming year in the build up to the UN climate negotiations in Glasgow, Scotland in late 2021, which are supposed to have a focus on finance.
However it is very likely that the fine print of these announcements will be insufficiently ambitious to actually achieve their stated goals. To make it clear what actions are required for finance giants to truly align the climate impact of their business practices with the Paris Agreement, a global set of climate and rights groups, led by Rainforest Action Network (RAN), has issued a brief set of “Principles for Paris-Aligned Financial Institutions: Climate Impact, Fossil Fuels and Deforestation.” The principles offer a roadmap for the decarbonization of the finance sector on a timetable aligned with the Paris Agreement.
“While the clean economy transition can sadly not be wished into being overnight, banks and others cannot believe that it is sufficient to just set decarbonization targets for 2050 — a whole generation away,” says Paddy McCully, Climate and Energy Director with Rainforest Action Network. “With the world reeling from ever worsening climate disasters, banks, insurers and investors must start taking action immediately to rapidly back off from financing climate change.”
Financing The Expansion Of Fossil Fuels And Deforestation
“The principles explain that to be taken seriously, financiers need both long term plans that zero out their climate pollution, as well as immediate steps to stop financing the expansion of fossil fuels and deforestation,” says Paddy McCully. “We need an immediate halt to lending, investing and insurance for new coal, oil and gas projects, and the companies that are building these projects. We also need an end to finance for the companies that are causing and encouraging the degradation of forests and other ecosystems.”
The groups say that “Paris Alignment” for financial institutions has to mean aligning financing, investing and financial services such as insurance with the reductions in pollution that will keep climate change to the Paris target of 1.5°C. According to the IPCC, that means halving pollution globally by 2030 and zeroing it out by 2050. This will in turn require ending support for all coal-related companies in wealthy countries by 2030 and globally by 2040, and ending finance for oil and fossil gas by 2050 at the very latest.
The principles highlight that limiting global warming to 1.5°C is also a matter of justice and the protection of human rights. It is necessary for respecting the rights of communities on the front lines of the climate crisis, fossil fuel extraction and infrastructure, and deforestation. The guidance includes a demand that rights must also be respected when taking action to address climate change, and a just transition must be secured for workers and communities currently dependent upon economic activities that will need to be rapidly phased out.
“We no longer speak of climate change - it is now climate chaos. Indigenous Peoples, in balance with Nature, and with the smallest carbon footprint continue to preserve 80% of the world’s biodiversity and with other subsistence agriculturalists, feed 70% of the people of the world. But those who profit from fossil fuel economies are investing in their own and the world’s destruction. What thought do they give to their own future generations?” said Tom Goldtooth, from the Indigenous Environmental Network.
Organizations Endorsing The Principles
The organizations that have endorsed the principles are committed to work together to increase the pressure on banks and other financial institutions to adopt them in the build up to COP26 in Glasgow.
Organizations endorsing the Principles include:
- Amazon Watch, US
- Asian Peoples Movement on Debt and Development (APMDD)
- Asociación Interamericana para la Defensa del Ambiente (AIDA)
- Bangladesh Krishok Federation
- BankTrack, Netherlands
Catholic Youth Network for Sustainability in Africa
- Catholic Network US
- CEE Bankwatch Network, Europe
- Center for Energy, Ecology and Development (CEED), Philippines
- Center for International Environmental Law, US
- Centre for Financial Accountability, India
- Climate Action Network Canada - Réseau action climat Canada
- Climate Hawks Vote, US
- Coastal Livelihood and Environmental Action Network (CLEAN), Bangladesh
- Digo Bikas Institute, Nepal
- Environics Trust, India
- Friends of the Earth US
- Environmental Defence, Canada
- Friends of the Earth France
- Friends of the Earth Japan
- Fundación Ambiente y Recursos Naturales (FARN), Argentina
- Indian Social Action Forum
- Indigenous Environmental Network, US/Canada
- Kiko Network, Japan
- Majority Action, US
- Manthan Adhyayan Kendra, India
- Market Forces, Australia
- Oil Change International, US
- Oriang Women's Movement, Philippines
- Pakistan Fisherfolk Forum
- People and Planet, UK
- Philippine Movement for Climate Justice
- Positive Money, UK
- Private Equity Stakeholder Project, US
- Profundo, Netherlands
- Reclaim Finance, France
- Re:Common, Italy
- Recourse, UK
- Sierra Club, US
- Solutions for Our Climate, Korea
- Stand.earth, US/Canada
- Tax and Fiscal Justice, Nepal
- The Sunrise Project, Australia
- Urgewald, Germany
- WALHI/Friends of the Earth Indonesia
- Women’s Earth and Climate Action Network (WECAN)
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