Major Wall Street banks have reportedly threatened to leave United Nations climate envoy Mark Carney’s financial alliance over legal risks.
Morgan Stanley, JPMorgan, Bank of America and Spanish bank Santander are among the banks that are weighing an exit as they fear being sued over the alliance’s stringent decarbonisation commitments, the Financial Times claims.
The Glasgow Financial Alliance for Net Zero (GFANZ), set up in 2021 by former Bank of England governor Mr Carney, is a coalition of assets managers, banks and insurance firms representing $130 trillion in assets directed toward tackling climate change.
Some members of the alliance have recently said that they “feel blindsided by tougher UN climate criteria and are worried about the legal risks of participation”.
The banks’ legal departments are particularly anxious about US Securities and Exchange Commission (SEC) rules around climate-risk disclosures, the report said.
The SEC will soon require formal disclosures in annual reports about governance, risk-management and strategy with respect to climate change.
The bankers have also complained that the demands placed on them are not supported by enough government action on climate change and that there are fewer members in GFANZ from the world’s top carbon-emitting countries such as China, Russia and India.
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